Halifax Childrens Regular Savings account

carolwat

We have money for our son in an investment account with Scarborough Building Society at the moment but this is due to expire and go into a normal account soon. He will be three in September so we are looking at long term investment or something where we have to reinvest each year or whatever we dont mind. We dont need access to the money at all for years. I have looked at the Halifax Childrens Regular Savings account and what Martin has to say about it and on paper it looks great. Hubby has just been in to Halifax and they told him we would be better off opening a normal savings account instead of the above. I have no idea how the interest works. We would have to drip feed £100 per month into an account each for him so apparently he wouldnt earn much interest but I dont know how it works with the 10%. It is 10% of the balance each month as interest or is it not that simple. I also dont understand the below statement. How is the average balance on £600. Actually I think just tying that has made sense so forget that.

'Halifax allows variable deposits of £10-£100 each month, meaning the most you can pay in is £1,200 a year; but as it only lasts a year, the average balance you can have in is £600. Not such a huge sum, but it still pays better than elsewhere.'

What I want to know is how much interest will he get for one year for one account with the full £100 per month for 12 months please.

If this isnt going to be as good as it sounds then can anyone recommend anything else that is going to give him the most interest, we can do either a lump sum of £2500 or initial lump sum plus regular monthly payments or just regular monthly payments.

Thanks in advance for trying to make it all a little clearer.
Carol

debbie42

carolwat wrote: »

What I want to know is how much interest will he get for one year for one account with the full £100 per month for 12 months please.

The average amount in the account over the 12 months is £600, so at 10%, with no tax, that would be £60 interest over the whole year.

debbie42

carolwat wrote: »

Hubby has just been in to Halifax and they told him we would be better off opening a normal savings account instead of the above. I have no idea how the interest works. We would have to drip feed £100 per month into an account each for him so apparently he wouldnt earn much interest but I dont know how it works with the 10%. It is 10% of the balance each month as interest or is it not that simple.

With this regular saver, you'd need a nominated account, and the save4it is paying 5.8% at the minute. So, if you didn't bother drip feeding the regular saver, you'd effectively miss out on just under £30 in interest by leaving it in the normal save4it account. You need to fund the regular saver by standing order, and I doubt a save4it can do that, so you'd need another account to handle that.

carolwat

Thankyou for your help. I dont think this is going to be as good for us as it first looked. That would give him £120 interest on the whole amount basing it on the limits on the account. Apparently he would get more with the save4it if we put the whole lump sum in that. They said he would get £150 interest.

Think we will have to look into this some more before making a decision as we dont want to be chopping and changing all the time and losing interest.

Thanks again
Carol

regularsaver1

you need to be careful with tax if he earns over £100 interest a year

there is a bit about it in this article from the Guardian:

http://money.guardian.co.uk/saving/depositaccounts/story/0,,2069114,00.html

and inland revunue/hmrc

http://www.hmrc.gov.uk/taxback/100pound.htm

carolwat

The money he has has genuinely been given by other people. He has had maybe £200 of it from us, the rest if from grandparents, great grandparents, aunts, uncles and friends. Do we need to keep proof that thjis has come from other people or is it taken on trust that this is the case if we complete the necessary form again. We already completed it for the account he has now. I think we will jst be reinvesting with Scarborough Building Society for another three years as they are coming up tops for what we want again.

Thanks again
Carol

debbie42

I keep good records of gifts etc. to my children. It makes sense to me in case the IR does ever ask.

The £100 is per parent, by the way, so at 6% interest, you could have over £1600 invested from each. Some NS&I investments are exempt from this tax angle if you ever do exceed this income.

jennifernil

If grandparents wanted to make regular gifts they could open a regular saver for him themselves. I have done this for our grandson. I started with £10 per month when he was born and increase that by £1 per month on each birthday. It's not a lot I know, but it will build up over the years.