Child Savings

PaulStat

So my son is now 16 months old, shortly after he was born we set up a Halifax child savings account that gave 6% tax free interest for a year with a maximum of £100 could be put in a month.

Well the end of the term has been reached and what they've done for us is transfer transfer last years funds + interest into a new rainy day savings account (base rate interest I think) and keep the 6% account open effectively starting from 0 again.

So my question is should I
a) Find a new account where I can transfer last years funds + additional funds I've accrued into the 6% this year.
b) Find a new account for just the rainy day funds?

Thoughts? Also any advice on the best options for a new account would be appreciated.

Thanks,
Paul

PaulStat

no one ?

atush

I would find the best rate available for children. what % are the matured funds getting? Have you looked at Child ISAs?

For a baby, personally not sure cash is the way to go as it is losing ground to inflation. I save in equities for my kids. I would consider saving half into equities.

Mikeyorks

PaulStat wrote: »

So my question is should I
a) Find a new account where I can transfer last years funds + additional funds I've accrued into the 6% this year.
b) Find a new account for just the rainy day funds?

a) No. Because you won't find an account that will pay anything close to 6% whilst accepting lump sums.
b) Yes. Except - if you're funding the 6% account with less than the monthly maximum - then use the accrued funds from last year to make maximum payments as early in the account year as possible. Not a huge difference .... but does maximise the benefit.

jennifernil

I am very surprised they have rolled the 6% account over for another year, they supposedly stopped doing this quite a while ago.

My husband had 2 for our grandchildren, matured early October. The accounts became "Young Savers" paying 2% and the SOs would have gone to those had he not cancelled them.

To start new 6% regular savers he would have had to go to a branch and open them (except he can't as there is no longer any Halifax branches in Scotland).

For the matured funds, do as Mike suggested if you are not contributing the maximum, otherwise, if you want a cash account, Northern Rock Little Rock pays 3%, as does Lloyds Young Saver, though you need to have a current account with them yourself to open one.

If you tie the money up longer, you can do better than 3%.

atush

They don't roll it to 6% they roll it to a lower int acct.

jennifernil

OK, wrong term!

The OP has had the 6% account "continued"once the matured funds were transferred out, which is something Halifax no longer do. What is the correct banking term for that?

Now the 6% becomes a 2% Young Saver with the same account number, and you have to open a brand new 6% regular saver.

The "rainy day account" the OP referred to will be the "save4it" account, which pays a miserly 1.05%