Best Account for 16 year old student!

madeinengland

I would really appreciate help on this one.I have two daughters in full time education.Ages 16 and 14.I have spent ages trying to work out the best accounts for them to move to.I have been working through all my finances-with this site and the book!Now I have got to the children I am having problems with the 16 year olds savings.This is now in a RBS route 21 @2.27% only.They dropped this one by about 1% from the route 15.Rip off.Loyalty as Martin warns should not apply to institutions-keep an eye on them all the time. Anyway,the time has more than come to move them both.Problem is I am finding that a lot of accounts end at 16 and begin at 18.Halifax looks good for the 14 year old.
thanks in advance ???

Sooler

I've no idea but how about a Cash ISA?, it says here they are available at age 16
http://money.msn.co.uk/Bank_Plan/Banking/Guides/Banksandbuildingsocieties/CashISAs/default.asp?MSID=544750dd45f44223bc2bae7b262601c8

Available as instant access, online or high street, ie the Nationwide one although not the absolute top interest rate (4.65%) is instant access and operates with a passbook so deady easy to use.

Reaper

Cash ISAs will be of less use to them than most as I'd guess neither of them is paying tax.

Here is an unusual suggest for you - the AA. It's a telephone based savings account which might be a problem. If that's ok then you will find it pays 5.36% (inc 1st year 0.7% bonus) and is available from age 16.

http://www.theaa.com/savings/index.html

Fill in form R85 too so they get the interest paid without tax.

madeinengland

Thanks for the comments,however the lack of easy answers does highlight the difficulty with this age group.
I think the banks are very poor in this area.Perhaps it would be one for Martin to push-maybe the first bank to become active in this field might corner the market for a while?
I did a little more research of my own today-a real eye opener-I will change banks shortly whatever happens having been embarrassed by my branch.
Quite funny if it had not been a serious matter.

Very short version-
I spoke to the branch direct
young employee answered

I asked her about ISA interest rates ref 16 year old.
Told she couldn't have one until she was 18!!

I questioned-she checked-same answer.

I said she could be wrong but I asked her to explain the 2% reduction in the interest rate for 16 year olds-ie route 21 from route15 account.

Was told that the bank didn't bother about 16 year olds saving-16 yr olds only spent their money on clothes and going out!!!
I said my daughter must be rare then-she saves as well.

I asked why a 16 year old could work and pay tax and also received a R85 form-but could not open an ISA?

You dont pay tax until you are 18-she didn't!!!

After I got up off the floor, I said I would employ my daughter and pay her £80000 pa then- tax free.
She even answered that one, still convinced she was doing a good job.
Dont be silly-only pop stars earn that!!There are special rules for them.

I phoned the Halifax-first class help.
More fool me for staying so long!

dunstonh

The age group 13-18 (pre university/work) doesnt have much money and therefore offers limited profitability. Why do they deserve their own account range?

Under the age of 16, they can have a child account. Over 16, they can have an adult savings account. If they go onto further education, they can get a student account and that is where the potential profits are.

madeinengland

I now know why I dont bother posting.Comments like yours really get to me.Do you ever remember being 16-dont you think a little effort on the part of banks to get your custom would have had a positive effect.Dont bother answering,I'm off to talk to my dogs.

madeinengland

Actually I will add.
Why do they deserve their own account range!!
Also,what do you think a 16 old is doing at college if not further education!
Is it something that can be missed out-I didn't realise.
It's a raw deal in my opinion.Perhaps she should go and work in a bank now-probably more up to the job than the girl who spoke to me.

dunstonh

I now know why I dont bother posting.Comments like yours really get to me.

You shouldnt start threads on forums if you dont want to debate the issues. Banks are not charities. They are there to provide a service where they can profit. If you feel that is wrong, then move to a communist country.

Also,what do you think a 16 old is doing at college if not further education!

You mentioned 14-16. Age 14 is not further education. Age 16 could still be final year or early sixth form.

College is further education and not higher education. Banks cater very nicely for those in higher education but provide nothing special for those that are not. And why should they?

A 16 year old can have any adult account. Some banks offer smaller incentives on their current accounts but nothing that special.

You still havent given a good reason why a 16 year old, who isnt in higher education, should have better terms than a normal adult account. I will be more than happy to agree with you if I felt there was a good reason to.

madeinengland

I do enjoy a good debate.I must admit I quite like this country-therefore I better change my views.
I will give some thought later to your points-maybe I was a bit over the top.
Confidence returned to forums!

madeinengland

I have just taken the plunge for my 16 year old.
I applied on the phone for a Halifax ISA.Instant access,she can use it on line or branch.I think it is called a telephone ISA.
She was given a ref and can use the account today at branch if she likes.
5.15% being paid.
Very good service-would endorse.
I actually am going to transfer our two accounts as well from the RBS-paying between 4.2 and 4.45%.

Sooler

The age group 13-18 (pre university/work) doesnt have much money and therefore offers limited profitability.   Why do they deserve their own account range?

Under the age of 16, they can have a child account.  Over 16, they can have an adult savings account.

The banks seem to think they deserve their own account range as that is what they specifically offer but  these accounts try to rip them off with pathetic interest rates.

See the RBS R21 account for 16 to 21 years olds - claimed to offer "Competitive rate of interest paid monthly" = 2.21%  - some type of con merchant?

As 16 to 21 year olds can open adult accounts why do the banks bother?

The original post stated that some adult accounts start at 18 - so not available to 16 year olds, which I think is the problem.