Child Regular Saving

mwilde

Hello
Please can someone offer me some advice - I have tried to research this but my head is spinning with all the options.

I have 2 little girls, one is 3 and one has only just been born (06/06). I have been saving for my oldest since she was born - £50 a month. I have a direct debit going into ING direct; now and again (not very often) I withdraw the money and put it into premium bonds. At the time when I started doing this ING direct had a very good interest rate. I think I don’t want premium bonds so want to withdraw them and put them into the new account.

I now want to save £50 a month for each of them (£100 in total). I don’t want them to be able to access it, until I allow it. The money will not be touched for at least 20 years. I want to save not invest as I don’t want to risk loosing money. I want to keep the moneys separate from each other as my eldest already has a couple of grand. Ideally I would like to add extra bits now and again, i.e. Birthdays and Christmas but it’s not essential.

mwilde

Ideally i dont want to me moving around ever couple of months, whilst using short term incentives.

debbie42

I'm looking at the ybs "one day" account for my two.
http://www.ybs.co.uk/savings/childrens/one_day/index.jsp

Interest is ok: currently 5.86% gross

In case you're not already aware, you do need to be careful regarding the tax arrangements on your children's accounts. If they are earning more than £100 p.a. interest from each parent's gifts, then the income is taxed at the parent's rate.

That's just over £1700 savings per parent at the above rate of interest.

mwilde

Am i better putting it the money into child savings or getting an isa or something?

Im looking for the best return for them both.

plonkee

If you don't already have an ISA that might be a good move, legally the money is your not your childrens and the interest is tax free.

If you open a savings account in the childrens name, then interest is paid tax free. Except as debbie42 stated above, the tax man will claim back the tax if you are giving them the money and it generates more than £100 in interest. Also once they are 18(?) they will have full access to the money.

If you want to keep the money separate, you will need you and someone else to open ISAs (1 per adult) for the children's money and you can't then open another ISA in the same year.

You could instead go for a monthly/regular savings account.

Whatever you do, its probably a good idea to check the rates every so often - I check and move annually.

mwilde

So what your both saying is

If i had a lot of money in the accounts, and i was earning more than £100 a year in intrested the tax man would want some? Does he just take the tax on the intrested or on the whole lot?

How much would i have to have in the account for this to effect me? And how much does the tax man take?

Sorry i have no idea about all this - just want to put some money away for my 2 little girls.

agal

Here's the HMRC website on this http://www.hmrc.gov.uk/taxback/100pound.htm

surfsister

I don't knoiw if this is any use good interest but will need to be in your name ans you can only open one isa per year but good interest and can be opened easily online amd operated online/po

6.05% up to 3k (perhaps you could split it 50/50 between the children?)

http://www.nsandi.com/products/disa/index.jsp

Also check out the regular savers Halifax I think does one with very good interest