Best saving accounts for kiddies?

my_gorgeous_ellie-belle

Hi there! Just a quick Q to see if anyone knows of a good savings account that i can set up for my daughter - she is only 8months old at the mo but i want to start early as i cant afford alot per month.

Im looking to put money in so she can put towards things like Uni, car, towards a first home. So prob something with a penalty for withdrawals or something (doesn't have to be though).

I may be looking into setting up a couple of accounts because i also want something she can start adding to and taking out off at about 10 or so, but something i can withdraw from for her before she is that age.

Also if anyone knows anything about setting up a pension fund for her - i only want to deposit £10-20 a month in this one though hence why im getting in early.

Ooh, something i can set up online would be perfect too - lol, im asking alot now!

Im a little lost when it comes to these things so all help appreciated!

Cheers guys!:D
x

Sulli

Hi,

Yes it is very confusing with so many options out there, we have 2 children, our Daughter is 2 yrs 9 m and our son is 5 months old, I spent ages looking on web to find the best deal when my daughter was 1st born and this is my advice:-

With regard to the Child Trust Fund Voucher - personally I would just put this into one of the accounts and not add to it.

And then open a savings account yourself with a high street bank or via internet banking etc.

The Halifax have a couple of good accounts for kids that can be opened by parents, the 1st one is the 'SAVE FOR IT' account,
http://www.halifax.co.uk/savings/regular_save4it.shtml

I have opened one of these for both of our chilldren, once you have the accounts number & roll number you can then set up a s/o to pay a set amount into it each month, also you get a passbook so amounts can be paid in at a branch, this is good if kids get extra money off grandparents etc.

The next account is the ' CHILDRENS REGULAR SAVING ACCOUNT'
http://www.halifax.co.uk/savings/childregularsaver.shtml

Again once you have opened this account you can have a standing order to pay between £10 - £100 every month, but you must pay between those amounts every month for the whole year or the interest rate is cut down to the one that they pay on the save for it account (which is quite a good rate aswell) then at the end of the year all the money saved plus interest is transfered to another account (i.e. a save for it account) and you then start saving again for a further year.

Again I have opened one of these for both the kids.

Can't give any advice on the pension side of things I'm afraid.

Hope this is some help

Claire

Mikeyorks

I presume you have a Child Trust Fund voucher .... in which case read this, as you can normally add your own savings alongside :-

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1108986373,87407,

.... then read the 'childrens' portion of this :-

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1151055096,42233,

..... the Halifax Regular Saver at 10% is very good. But ensure you realise that (the max of) £100 monthly at 10% ... 'only' generates approx £60 in gross interest in the year. As you only have an average £600 in the account! Link here :-

http://www.halifax.co.uk/savings/children.shtml

.... you can continue the account into future years - but the proceeds are swept out, each year, into a Save4it account.

BTW ..... sorry to advise (your sig) Christmas has now passed:santa2:


EDIT

Sorry - crossed over a bit with Post #2 .. during the research!

Sulli

Mikeyorks- yeah I know that you can only deposit a maximum of £100 p/m into the regular saving account and it will then be trf to the save for it account at the end of the 1st year and start over again, but you may aswell benefit from the 10% for the year, and then it will earn 5.30% (current rate) in the save for it after the 1st year, and then the 2nd year you will again benefit from both 10% on the saving account and 5.30% on the amount that was trf from the pervious year. Seems good to me, I can't be arsed with the stocks and shares etc with the child trust fund accounts and also they charge commision on most if not all of the nomibated ctf accounts, thats why I have just put the £250 voucher into one and havn't added any other money to it.

my_gorgeous_ellie-belle

Yeah i keep meaning to change the sig, its been there for ages! Doh me!

Thanks for that - im just about to look into the Halifax accounts and see if they sound good for me.

I agree will Sulli about the CTF voucher - I too have put it in a stocks and shares account as soon as bubba was born but dont really want to put in much more due to the risks involved - i have a DD od £10 that goes into it per month but i really don't want to put more than that - with my luck it wouldnt give a great return. Not only that i prefer to know what the money is doing and those type of account can be a little hard to keep track of.

As i said i want to save for a few different bits for her - do you think its a good idea to open a few different accounts or better to try and keep them together and just keep a running moneypot spreadsheet at home?

Mikeyorks

my_gorgeous_ellie-belle wrote:

Yeah i keep meaning to change the sig, its been there for ages! Doh me!

You changed it .. just for me ..bless.;) Now I can admit we bought two Christmas decorations whilst out for lunch today! :rolleyes:

my_gorgeous_ellie-belle wrote:

I agree will Sulli about the CTF voucher

Fine. I agree as well .. but mainly because of this bit, from Martin :-

Is it worth adding to the CTF?
On the surface this is a tax-efficient scheme, so it’s a good idea. Yet it has two major drawbacks.
The money goes direct to your child. Babes in arms now, can grow to be rebellious 18 year olds. The CTF goes straight to them. Your savings for their college fund may be spent in a day on a Playstation, world trip or some darker purpose. It is their money, you can’t stop them. Do consider whether you want your child at 18 to have complete autonomy over all this.

It strikes a real chord with me .. and I could have written it for him. Difficult to imagine with an 8 month old delightful bundle? And, at 16 years, my son was sensible, easy to manage etc etc. But .... I saw a change as he left school, and it was too late to pull all his money back into my care. Net result he blew over £10k in his first few months at Uni .. and it was a real bit of soul searching as to whether we baled him out, or let him sink. Obviously went for the former and started paying him a monthly allowance. But it's cost us dear .. both in terms of money and trust. It's a choice you have to make - but, as the quote says, 'do consider ...'?

my_gorgeous_ellie-belle wrote:

As i said i want to save for a few different bits for her - do you think its a good idea to open a few different accounts or better to try and keep them together and just keep a running moneypot spreadsheet at home?

Look for the best - and mainly keep it there. Personally I'd simply maximise the savings - then divide it into pots at a much later stage. And I'd seriously consider the Halifax 10% - whilever they're running that. It's the best paying account for children on the market currently - despite you have to clear it out annually therefore the 10% never operates on consolidated funds. But it's still 10% !!

Mikeyorks

Sulli wrote:

Mikeyorks- yeah I know that you can only deposit a maximum of £100 p/m into the regular saving account and it will then be trf to the save for it account at the end of the 1st year and start over again, but you may aswell benefit from the 10% for the year,

Sorry - I've either been unclear, or you've misread me? I fully agree that it's a really good account - and particularly if this is 'new' money which you're saving for the first time out of current income etc.

It's just that there have been so many threads recently from disenchanted people who firmly believed that if you had £1200 in at the year end - you just got 10% of that? (i.e £120) And find it very difficult to comprehend that you only get e.g (£100 @ 10%) / 12 = £0.83 interest for the last month payment - not the £10 they somehow expected.

So, I was simply ensuring awareness of that - not that the account was otherwise than excellent for its purpose.


~~~~~~~~~~~~~~~~~~~~~~~~~




Incidentally (to both of you) - despite this is a Childrens Account - the Interest is not automatically paid free of tax. You have to file an R85 to get the Interest paid gross. Halifax don't accept paper R85s - so you need to go into Branch or 'phone them (NI number of the account holder needed) - then it's done and they'll just write to confirm. Only needs doing once, if you run the account into future years.

Apologies if that's 'sucking eggs' etc?

my_gorgeous_ellie-belle

Thanks for that!

I had a look at the Halifax account and it deffinately looks good. After 12 months it sweeps the amount into a 5.something kids saver account (save4it) but then the 12months of 10% rate begins again. So what i will prob do is from the second on year is continue paying in the origional amounts and also instalments taken from the new balance in the save4it account, thus making the money work a little harder. And then continue this each year till either they stop the product or i hit the monthly deposit limit. Sounds like a plan to me!

As for her getting a little overjoyus about a lump sum - deffinately makes sense. I was a little wiser as the only money i ever had since my early teens was what i went out and earnt myself - but my OH on the other hand done the same type of thing when he was given a credit limit of £3k on one of his credit cards, the worst thing is he was only 18. It was the best christmas and few months after but now he is still paying for it almost 4 years on.

This is the reason i'm hoping i can train her early. We have decided she prob wont know about some of the savings for her until i have seen a bit of financial responsibility and a deffinate understanding about money. Or we may go the other way and persuade her to add to her own savings and they are to be for set things (ie, car, deposit for a home, Uni), that way it should be more appreciated.

My word, im looking into the days when my little girl wont be so little. Very scary! Lol.

About the christmas decorations - i'm guilty too - i just cant pass a good bargain!

Mikeyorks

Excellent.

Couple of things :-

1. Bear in mind each parent can open one of the 10% accounts. So, possibly when you decide to re-cycle a bit of the money from the 1st year (look @ the T&Cs of the Save4it to ensure no withdrawal penalties) - worth opening a 2nd account?

2. This is from the bottom of the FAQs for the 10% account :-

How long is the 10% interest rate payable?
The 10% rate is fixed for one year from when the opening credit is received. If you continue to fund in subsequent years, we will communicate the new fixed rate to you.

That reads as though it's a reduced rate in the 2nd and subsequent years? But .. no one on these forums appears to have experienced that and, when asked, claim to be getting the 10% year on year.

Best of luck.

my_gorgeous_ellie-belle

Silly me - never got that far down in the FAQ's, will take a thorough read i think.

No withdrawal penalties on the Save4it, that why i got the idea.

Never considered opening a second account as by a silly rule of thumb we always put both names on everything - thinking about it that can be quite daft of us, just its always been convenient - so two accounts sound even better.

Will be putting my maths head on i think - try figure out how we will get the biggest return - open two account now or open the second next year (big risk of it not being avalable though).

I understand the whole interest malarky so thats ok, after a couple of hours of trailing websites and scanning the t&c's its still seems the best to be had at the mo. I suppose thats another good point - its nots fixed(lol, penalty to me means fixed) for too long, i can transfer it elswhere if a better deal arises.

I must say a big thank you for your help!!!

- before not so long ago i have always done things as convenient and not thought too far into it - i have always settled for a 'good' deal and not searched out the 'best' - So now this is another to go along with all my other new moneysaving methods!

my_gorgeous_ellie-belle

I think i will leave the rest the playing around with figures till tomorow as my brain has now stopped working! LOL! Im seeing too many numbers!