Opening new savings account for our baby today, what type is best?

atush

Indeed. I like Investment trust savings plans.

Having said that, at 6% i'd open the Halifax one lol

opinions4u

mildred1978 wrote: »

I'm not sure what the point of a junior ISA is - kids rarely need to pay tax on their savings anyway!

£4,000 of a parent's money given to a child and saved at 3% will earn £120 interest. That's above the £100 rule and as such if the parent is a higher rate taxpayer a £48 tax bill is due. £24 for a mere basic rate taxpayer.

Mikeyorks

mildred1978 wrote: »

I'm not sure what the point of a junior ISA is - kids rarely need to pay tax on their savings anyway!

So where else (Halifax junior ISA) will you get a cash equivalent paying 4.8% on a lump sum?

mildred1978

Mikeyorks wrote: »

So where else (Halifax junior ISA) will you get a cash equivalent paying 4.8% on a lump sum?

Good point. I hadn't seen that.

dottydee_2

atush wrote: »

No, you can transfer.

And I can guess you have no ISAs for yourself? If you pay tax, you should.

No, no ISA's of our own I think it is something we should look into.

dottydee_2

Well that was a fun afternoon spent, we sat in a Halifax branch for an hour to be told the advisor had gone over time with their previous client and as it was quarter to there was no point in speaking with us as they were closing......but we could make an appontment from 20th Feb!!

Thank you so much for all your help everyone, I guess having to wait for the Halifax gives us more time to have a look around. I see that the Halifax junior saver has a min £10 deposit a month which seems fair to me, After reading mildread1978 post if we are looking to put in £100 a month would/should we sign up to a second account?

Mikeyorks

dottydee wrote: »

After reading mildread1978 post if we are looking to put in £100 a month would/should we sign up to a second account?

I think you're misunderstanding that? By 'on 2nd account' I think she's implying this is the 2nd year they've been contributing to the Children's saver? It only lasts for a year - the funds + interest are pushed out into a nominated account - then you restart if from scratch ..... and you will get the interest rate in force at the restart point.

If you're making regular payments (and you can vary that from £10 to £100pm) - you won't beat the Halifax (Regular Saver) account for drip feeding funds.

Do consider, however, if you want your little girl to have access to all the money at 18? A lot of young adults go through a fairly awful (and hopefully temporary) metamorphosis around that age. And there's nothing worse than seeing them blow all the hard won savings in a short time. If you have doubt - then the Junior ISA isn't the right vehicle. Put it in one of your own - that way you have jurisdiction over it until common sense kicks back in again.

dottydee_2

Thanks Mikeyorks, it really is getting confusing now lol!! I take your point about the teenage horror years Maybe we should just not tell her she has an account until she is 21. I take your point about having our own savings account, the sticking point is she has been given some large cheques as well as cash for her birthday. I keep thinking about the ISA route but as I said before we have never set up any kind of ISA before so finding it all a mind field.

mildred1978

Yes, regular saver ran for 12 months and then switched to a standard savings account. I went in to withdraw the cash and they restarted it with the same details (so standing order etc didn't need changing).

I'm the only signatory on my son's accounts - would be a pain to manage if we both had to trek into town to do anything with it.

Mikeyorks

dottydee wrote: »

I keep thinking about the ISA route but as I said before we have never set up any kind of ISA before so finding it all a mind field.

Sorry I'd forgotten about the cheques.

The Halifax Junior ISA looks very good value at 6%. But you will need to set one up alongside it to get that rate (otherwise you only get 3%). But you only need to put a nominal figure (over £1) into yours in order to get that 6% 'relationship' rate.

Consider - the Halifax Regular Saver at 6%. You fund that for a year at between £10 - £100pm. At the end of the year you move the consolidated funds out and into the Junior ISA? Which you set up immediately and fund with the money you have in hand?

But - you can't pay the cheques into the ISA. You will have to put them in the Regular Saver (or open a temp savings account to encash them) to clear them first. As the ISA rules insist that 'own cash' only can be used to fund an ISA - and 3rd party cheques don't conform :

HMRC_guidance wrote:

They must subscribe with their own cash, and this includes payment by cheque, direct debit, charge card, credit card, telegraphic transfer and standing order. Cash subscriptions from third parties can be accepted without question unless the ISA manager holds information that shows that the cash does not belong to the investor.