Savings Account for Granddaughter

wallace7

We would like to open a savings account for our granddaughter who was born a couple of weeks ago.We are thinking that a Junior ISA might be the right way forward. We want to but money in on her birthdays/chistmas and maybe other occasions. Are grand parents allowed to open accounts for their grandchildren? Is the JISA the best option? we were thinking either the Halifax or nationwide.
Any advice and thoughts welcome.
Thank you

wallace7

We would also if pos prefer it if the account was one that was just for us to pay into, so that when she is older she will know that the money came just from us, not other family members. However I take it a child can only have one JISA?

xylophone

https://www.gov.uk/junior-individual-savings-accounts/overview


"Only parents or a guardian with parental responsibility can open a Junior ISA for under 16s.

Anyone can pay money into a Junior ISA, but the total amount can’t go over £3,720 in a tax year."

It might be possible for you to be a joint bare trustee on an account for a grandchild but only the parent or guardian could sign any R85. http://www.hmrc.gov.uk/forms/r85.pdf Example http://uk.virginmoney.com/virgin/savings/learn/childrens-accounts/

If you are saving for the long term you might prefer to consider a regular investment into an investment trust - you could be joint bare trustee with a parent. Example here http://www.sit.co.uk/products/investing_for_children/features/questions_and_answers/

wallace7

Thank you for your reply. I shall look into the links that you have posted, thanks

jennifernil

I am saving for ours in the TSB (also available from Lloyds) Young Saver, it pays 3%. You have to open a current account with them yourself first. That is easy to do.

I am the sole Trustee, but a parent had to sign the R85 for gross interest.

I also have Halifax Kids Regular Savers for them, they pay 6%, but you have to pay in £10 to max £100 every month, you can easily vary the amount. Then after 12 months I move the final amount to the Young Saver.

To open any of these accounts you will need a copy (real copy, not photocopy) of the child's birth certificate.

Biggles

xylophone wrote: »

Anyone can pay money into a Junior ISA, but the total amount can’t go over £3,720 in a tax year.

I couldn't believe it said that - but it does. Very shoddy wording.

The total amount can carry on going up indefinitely. What can't go over £3,720 in the (current) tax year is the amount added to the account.

Biggles

If you are investing from birth to age 18, I don't believe using a savings account is a worthwhile way of doing it. The end result will likely be hardly any more than you've put in, adjusted for inflation.

And there's little point in using a Junior ISA anyway, unless either the rate is better than other accounts or you are contributing a largish sum (as the interest will remain below than their tax-free allowance, even by the age of 18).

You should consider some exposure to equities. I am putting money for my grandkiddies in F&C's Children's Investment Plans as a bare trust. Taxation isn't relevant to a capital gain until the gain exceeds their annual CGT allowance, so ISA protection isn't necessary (and, if they did do well, I plan to sell and buy again before gains exceed their limit).
http://www.fandc.com/uk/private-investors/savings-plans/savings-plans-range/childrens-investment-plan/

There are several investment trusts available; the Global Smaller Companies has gone up by 45% in the 16 months since I have been contributing. There are charges, but DYOR.

sambalina

I recently opened a young saver for my daughter with Halifax, pays 3%.
Just seemed to me like the better option. A JISA would always be the child's money and for them to do as they please with when they hit 18. A Young Saver gave me a bit more control, she will get a cash card when she is 7 and can get balances, withdrawal etc from a cash point! Of course she is never going to get this until she is much older but I felt it gave me more control over that money till she hits 18!
Also there are data protection laws to think about too! I think they told me that even though she is only a baby she is still a person in her own right and therefore her bank account is just that! Hers! I can request a balance enquiry that I have to sign for but that's pretty much it! Can't remember the details exactly!

wallace7

Thank you all for your advise which has been very helpful.