£100 interest limit in childrens savings account

nanceeuk

Hello all,
wondered if someone could help clarify something for me - suffering baby brain at the moment!
I want to open a regular savnigs account for my baby. Have determined that savings might be preferable to isa due to the generous £100 interest tax free limit they impose. I have read that this is £100 a year, and only relevent for contributions made by one parent. However, my question is this: If I kept making contributions and the size of the balance grew year by year - is this £100 interest tax free limit imposed on the total balance, or just new contributions made that year? If on the total balance, then I would think the £100 interest limit could be reached very quickly over say 2 -3 yrs, making regular savings less attractive. Could someone set me straight?
Many thanks all,
Nancy

Reaper

nanceeuk wrote: »

Have determined that savings might be preferable to isa due to the generous £100 interest tax free limit they impose.

ISAs (e.g. JISAs) are tax free too and have no £100 limit.

is this £100 interest tax free limit imposed on the total balance, or just new contributions made that year?

It's on the total balance.

xylophone

Hello all,
wondered if someone could help clarify something for me - suffering baby brain at the moment!

For explanation of £100 rule where money is given by parents see

http://bank.virginmoney.com/savings/learn/childrens-accounts/

The rule does not apply to JISA- have you seen the generous terms offered by Halifax if the parent has an isa with them?
http://www.halifax.co.uk/isas/

See https://www.gov.uk/junior-individual-savings-accounts/overview for information about the JISA and how it works.

thenudeone

You need to remember two things:

1) Interest on gifts given by anyone other than a parent are not subject to a £100 limit
2) Cash is not traceable

Go figure;)