Best account for my children to put savings in

lou47lee

My 3 children have been left £5000 each from my nana when she passed away, they r 9, 6 and 15mths the 2 oldest have a Barclays account but the youngest doesn't have a account set up yet.

What account is best for me to open for them so they get some interest built up. They are not going to have the money until they are at least 18.

Any help gratefully recieved

X

Vortigern

Halifax Children's ISA pays 6% if parent also has a Halifax ISA. You can't put £5000 in immediately. You'll have to split the deposits over this tax year and next.

lou47lee

Thankyou for that, we don't have a Halifax account though, if that's the best around maybe we could open one x

eskbanker

The next best, according to the main children's savings article at http://www.moneysavingexpert.com/savings/child-savings-tax-free, are various 3% products, but at least you can get 3% on the whole £5K straightaway, so it's not as big a gap as it might look....

Vortigern

The link given by eskbanker doesn't mention children's ISAs.
This one does http://www.moneysavingexpert.com/savings/junior-isa

The OP could:
Open a Halifax ISA for him/herself and pay in at least £1
Open a Halifax Children's ISA for each child and pay in £3720 to each
Open a 3% account for each child and pay in the rest of the inheritance.
Register HMRC Form R85 on each 3% account to avoid tax being deducted.
Transfer cash from 3% accounts to ISAs when new tax year starts next April.

If OP already has already opened an ISA for this tax year, they'll need to transfer it to Halifax rather than opening a new one.

eskbanker

Vortigern wrote: »

The link given by eskbanker doesn't mention children's ISAs.
This one does http://www.moneysavingexpert.com/savings/junior-isa

True (although there is a link to the ISA page from there) - since there are ISAs with better rates than non-ISA accounts, but subject to annual limits below OP's inheritance amounts, you'd need to open multiple accounts in order to maximise interest, it's never easy!

Vortigern

eskbanker wrote: »

True (although there is a link to the ISA page from there)

Indeed all the links on that page are worth following. My concern was that the OP might have followed a link to the Halifax Children's Regular Saver (also at 6%) rather than the ISA. The regular saver wouldn't be appropriate for an inherited lump sum.

eskbanker

Just to follow up on the earlier posts about junior ISAs, only the youngest of OP's three children would be eligible anyway, according to the age-related rules specified at http://www.moneysavingexpert.com/savings/junior-isa#whatis

xylophone

https://forums.moneysavingexpert.com/discussion/comment/63112222#Comment_63112222
post 5

lou47lee

Thankyou to everyone for all your help, boy it's confusing isn't it, we have never had to do anything like this before and it's mind boggling.

Someone has mentioned to me about using the money to buy premium bonds for each child, any ideas on that from anyone?

eskbanker

lou47lee wrote: »

Someone has mentioned to me about using the money to buy premium bonds for each child, any ideas on that from anyone?

On average they pay out 1.3%, but with a small number of large prizes the vast majority won't achieve this percentage, so in strictly financial terms they're not a particularly tempting proposition, but of course the potential to win a big prize has its appeal!