Child Savings Accounts Which one?

lucymumof1

Good morning all,

I'm very confused over which savings account is suitable for my daughter and hoped someone knowledgeable in this could help. She was born in 2008, we invested her CTF into a Britannia Account: Child Trust Fund Non Stakeholder. It's earning 1.05% and I'm fairly sure I should be investing her money elsewhere to get a better return.

Can anyone help with what options are available to her? I had read somewhere that children who have CTF accounts are not eligible for some other savings accounts (Junior ISAs?). I don't mind leaving the money in her CTF account if it cannot be transferred to another account and then just starting from scratch with a higher interest account but I don't know if this is a good idea.

I would appreciate views on this and I apologise if this has already been covered elsewhere. If it has please let me know and I'll delete this and look in the right place.

Many Thanks for taking the time to read this.

Lucy

snowcat53

Not sure about what account this is but 1.05% is appalling and you can and should move it. It's easy. According to this http://www.comparechildtrustfunds.co.uk/cash-child-trust-fund.html Britannia pay 3.5% on a cash CTF - better but still below inflation.
EDIT - thisismoney table gives best rate with Hanley Economic @ 5%

To do better you need to consider share based CTFs. I wouldnt touch the one Britannia offer via the Children Mutual though.
Try this link for a review article
http://www.thisismoney.co.uk/money/news/article-1587994/Junior-Isa-Child-Trust-Fund-How-save-children.html

My son's is with F&C shareholder (non stakeholder, with much lower charges than the 1.5% alowed and always charged on 'stakeholder' accounts). The F&C Investment Trust has been a very solid performer or there are more adventurous funds (higher risk, maybe higher gains).

You do need to save as much as you (and relatives) can (up to 3600 pa limit) to give a decent sum by age 18.

For money that may be needed before 18 you can get 3% in Little Rock account with Northern Rock.

Just to add the advantage with CTFs is that there is no tax no matter how much interest is earned (there is on an ordinary child savings account if money comes from parent and interest is over £100), and it cant be taken out before 18 , rediucing temptation to blow it on latest toy/phone/gadget. Forget Junior ISA - if you have a CTF you cant have a JISA - that 's the replacement scheme.

xylophone

(there is on an ordinary child savings account if money comes from parent and interest is over £100)

Per parent - see http://www.hmrc.gov.uk/tdsi/children.htm
It certainly makes sense to keep any money given by parents (outside tax exempt schemes) separate from money given by others.
http://www.direct.gov.uk/en/moneytaxandbenefits/managingmoney/planningyourpersonalfinances/dg_10013916
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ChildBenefitandChildTrustFund/ChildTrustFund/WhentheChildTrustFundisupandrunning/DG_193644

http://www.moneysavingexpert.com/savings/child-trust-fund-vouchers

SqueekyMouse

My daughter was born in 2011 so I don't know anything about CTF, but the interest rate you're getting is terrible!

I haven't been able to find any long term savings accounts for my LO (apart from the junior ISAs which I don't think much of and aren't applicable to you anyway).

The best account we found was a 5 year bond with the Yorkshire bank at 4.25% - it allows one deposit only (I wouldn't imagine you'd be able to remove money from the CTF to put into it though), but it would be good if you had a lump sum hanging around!! Halifax also has a regular saver for kids for up to £100 a month at 6%

I'd be interested if anyone else has found any other good savings accounts for children

Margey

Hi

So the bad news is that any child with a Child Trust Fund will simply not qualify for the Junior ISA, this is one of the biggest rules impacting on parents looking to open the account for their child.

there are some options, like possibly saving for your child using an ISA in your name, Or something that many parents and grandparents are looking to do and that is save into a pension for their child.

its a shame that the Government has not opened the Junior ISA to those children with a Child Trust Fund especially when the rates on the new account are so competitive.

There is a Young Saver Plan, I have attached the link here, as far as i am aware this can be opened for children with the Child Trust Fund.

Hope this helps

Margey

xylophone

SqueekyMouse wrote: »

My daughter was born in 2011 so I don't know anything about CTF, but the interest rate you're getting is terrible!

I haven't been able to find any long term savings accounts for my LO (apart from the junior ISAs which I don't think much of and aren't applicable to you anyway).

The best account we found was a 5 year bond with the Yorkshire bank at 4.25% - it allows one deposit only (I wouldn't imagine you'd be able to remove money from the CTF to put into it though), but it would be good if you had a lump sum hanging around!! Halifax also has a regular saver for kids for up to £100 a month at 6%

I'd be interested if anyone else has found any other good savings accounts for children

But parents need to be careful about tax when saving for their minor children outside tax exempt schemes- see links previously posted.