Childrens savings

Silver_Lilly

I am sorry to ask this again but still do not know the answer and can't work out how to start a new thread.

My baby girls granparents want me to open an account in order to save money for her.We dont want them to add to her CTF account so want to open another one.

I am not sure if this should be in a ordinary high interest account or a lower interest childrens account,so she would pay less tax.

We would then open a second account to save for her for ourselves which account type would be best then?

Sorry if i am missing an obvious point somewhere i'm fairly new at this!

isasmurf

It doesn't matter whether it's an ordinary account, or a dedicated childrens account. With both types of account tax will be automatically deducted. You need to fill in an R85 form, which the bank should give you when you open the account, to receive the interest tax free.

So the answer is go for the highest interest you can find, without unnecessary fees or penalties.

Silver_Lilly

Thank you so much!

Swattie

A&L are in the process of reducing the interest rate on Childrens account to only 3.65% down from 5.25%.

Avoid like the plague.

There are a number of ex building societies that offer better rates for simple savings accounts eg Nationwide at 5.01%

TimC

Swattie wrote:

There are a number of ex building societies that offer better rates for simple savings accounts eg Nationwide at 5.01%

Nationwide is still a building society!

Just remember to fill out the R85 as previously mentioned.

Has anyone actually declared children's interest to the Inland Revenue in excess of the £100? It must be awfully complex - I could argue that our daughter's spend the pocket money we give them, and save the pocket money from their grandparents! Then there is the added complication that my wife is non-taxpayer so it would only be me avoiding tax on part of it. Glad the girl's aren't in that situation yet!