Savings account for a child

islandblue

Hi there!

I'm new to the forum so please be gentle!

My best friend is due to have her first child later on this year. Once the baby is born would it be possible for me to start a savings account in the childs name that I can pay into every month with the idea being that when the child reaches 18 the money is then theirs? I am obviously happy for my best friend to have access to the account and for the account to be set up in my best friends name if needs be - as long as I could set up a regular monthly payment into the account. If this is possible does anyone know of any particular banks/building societies that are particularly good for this kind of account that I/we could approach?

Many thanks in advance for your help

Reaper

The simplest thing is for your friend to set up a Junior ISA when the child is born and then you pay into that.

If the annual contribution limits might be exceeded then there are other choices.

Incidentally over the long term (and 18 years is long term) an investment ought to do better than a savings account. Savings accounts often fail to even keep up with inflation so I would suggest the JISA was an investment one, but that's up to you and the parents.

riccaricca

As I understand it, (trying to find an account for my granddaughter) the only think with the Junior ISA is that at 18 it becomes the childs and they can do whatever they want with it, whether you or your best friend approve.
I've opted for a Halifax children saving account, it pays 6% and you can save upto £100 per month. Admittedly its only for a year and then it has to be moved into a different account and I think you start again. Your friend has to open it but the money can come from your account. This way your friend still has a say even when the child reaches 18.
And I agree with Reaper, that an Investment account should do better than a saving account.

cloud_dog

riccaricca wrote: »

As I understand it, (trying to find an account for my granddaughter) the only think with the Junior ISA is that at 18 it becomes the childs and they can do whatever they want with it, whether you or your best friend approve.
I've opted for a Halifax children saving account.....

And I assume the account is designated in the child's name? In which case are you aware at what age the money in this account legally belongs to the child?

islandblue

Ah, that's fantastic, thank you so much both for your help, that's great - I'll discuss with my friend everything you've said and we'll go from there. The advice is very much appreciated

xylophone

I've opted for a Halifax children saving account,This way your friend still has a say even when the child reaches 18

http://www.halifax.co.uk/savings/accounts/branch-accounts/#kidsregularsaver

This account is in the name of the child so belongs beneficially to the child? The parent is holding the account in bare trust?

The maximum age the child can be when opening the account is 15?

Once the child is 16 either the money is handed to the child or is held in bare trust until the child is 18 - if this is the case then another bare trust account would need to be opened - no R85 could be registered - the parent would have to reclaim any overpaid tax on behalf of the child.

danielhermann

I would like you to explore the idea of breaking the amount you wish to invest in 3 or 4 parts. Purchase an insurance policy in the name of the child with one such part. Opt for the cash value option. This should help to provide for the kids college education.

jamesd

danielhermann wrote: »

I would like you to explore the idea of breaking the amount you wish to invest in 3 or 4 parts. Purchase an insurance policy in the name of the child with one such part. Opt for the cash value option. This should help to provide for the kids college education.

I would like you to explore mentioning products for UK people that are available in the UK, rather than products that are available in the US.

You might also find it useful to learn something about university funding here before suggesting plans to pay for it. It's very different from the US system.