Best place for £3000 for two years

mckat_2

My 17 year old daughter has been given £3000 and wants to save it for 2 years so she can then buy a car. Any suggestion?? I have looked at junior ISAs and not sure if this is the best way forward. She is 18 in January. Thank you.

xylophone

As she is over 16, she could open a Junior ISA with Halifax which pays "relationship interest rate"of 6%? "The account must be opened by an adult with parental responsibility if the child is under 16, or by the child if they are aged 16-17
Withdrawals from any Junior Cash ISA are not allowed until the child reaches the age of 18, except in case of the child's death or terminal illness".
http://www.halifax.co.uk/savings/accounts/branch-accounts/ " For children 16 and over, the relationship interest rate will automatically apply to the account".

"When the child reaches the age of 18 their Junior Cash ISA will mature into an adult cash ISA where they can continue to save without paying tax on their existing balances".

Once she is 18 she can transfer to another ISA provider if she wishes

or indeed to another savings account. No doubt she would look for the best rates available at the time?

If the Halifax won't permit her to open this account because she is already 17 (it is not clear whether this would be the case) she can just look for a best buy - don't forget R85 if she is eligible. http://www.hmrc.gov.uk/forms/r85.pdf

http://www.moneysupermarket.com/savings/?gclid=CKOn7K-sjLACFVMetAodaWZTqQ&source=GOO-13176579&p=0&keywords=best+savings+account+ratesExact&ef_id=TKI1yAqoEGQAAHIBs24AAAzI:20120519122607:s

Margey

Hi,

well the Junior ISA is an account that is offering some very good rates like the 6% from Halifax i have attached a link here. This from my last check was still the highest rate on offer.

there is also a loophole that can be taken advantage of which allows you to open a Junior ISA for your child provided he or she is under 18, like yours is, and at the same time open a cash ISA for them.

the Junior ISA will turn into an adult ISA once your child turns 18 so it will remain tax-free and she can continue contributing into it. if you are looking for a bigger return you can consider the stocks and shares Junior ISA, but since this is linked to the stock markets it does come with a bigger risk

i hope this was helpful

Margey

mckat_2

Thank you. We will go in to the Halifax this week and apply. Really appreciate your help.