Halifax 6% Childrens's Account: Opening Requirements

innovate

Froggitt wrote: »

The JISA they would only open in branch. .

The JISA is the one that you can apply online for.

knack92

innovate wrote: »

The JISA is the one that you can apply online for.

Do you know if it can be funded online or only in branch?

innovate

Their website says

View your balance and manage your account in branch only.

PeacefulWaters

knack92 wrote: »

Do you know if it can be funded online or only in branch?

There won't be anything to stop you sending a Faster Payment to it.

ang61ry

Many thanks all for your comments.

I am talking about the 6% reg saver. I do understand that if you are late for an appointment then there are repercussions for the next customer. However, since I had booked the slot and it couldn't be filled by anyone else - since a whole hour is needed - then you might think that they could at least have said that we could sit down and start a discussion, prior to making another appointment, rather than coming out po-faced telling me that she couldn't see me at all??

My comment about being a single parent + 2 children relates to the innate difficulty in finding a slot at all. All weekday slots are when I work during the week and the Saturday slots are complicated by the usual ferrying around situation in taking a child to another appointment especially when you don't have another parent to cover that drop-off. If the tutor/coach is delayed - you can't just leave the child unattended just because you have a subsequent appointment.

For the amount earned over a year this account is not worth the hassle. It would have been more helpful for Halifax to state on websites such as this that an hour's appointment would be needed to open the account, rather than simply "in branch". An appointment in no way implies an hour - certainly not to those of us who who only get to the bank at 9.00pm each night on the internet

PMack_2

I went in this week to open this account for my kids - Don't bother opening this account, Its a waste of time especially if you have a balance you want to transfer as you can't.!

You don't get the 6% you are expecting. I was told by their adviser that it actually reduces throughout the year down to zero and you end up with only 3% so you might as well open up their normal kids saving account which pays 3% and is not restrictive like the regular saver. The regular saver transfers into this account anyway after 12 months.

I had a "discussion" with their chap saying that the website is completely misleading and the only way you know you're not getting the headline rate is their example which says if you pay in £50 each month then at the end of the year you get £18.97 gross interest.

I wasn't impressed with their marketing to say the least.

That said the 3% normal saver is a good rate.

Archi_Bald

You do get the 6% AER in the kids saver. Nothing reduces to 3% or 0%. All regular savers work like that. In fact, all savings accounts work like that - you only get interest for the days you have money in the account.

For example, if you put £1,000 into the normal 3% saver today, and another £1,000 in 180 days. The interest that you make from that account over a full year is then:

£1,000 * 3% / 365 * 365 = £30, plus
£1,000 * 3% / 365 * 185 = £15.20

You can use the MSE Regular Savings Calculator to work out interest from Regular Savers.

You are of course right, if you want to deposit a lump sum upfront, a Regular Saver on its own is rarely suitable. But that is not due to the interest, it is due to the max amount you can deposit. Also, if you drip feed a Regular Saver from a normal savings account, you generally can boost the interest you earn. Well worth reading up about drip feeding. The "adviser" in the bank should perhaps also read it.

bowlhead99

PMack wrote: »

I went in this week to open this account for my kids - Don't bother opening this account, Its a waste of time especially if you have a balance you want to transfer as you can't.!

The clue is in the name, it is a "regular saver". It is designed to put away money regularly each month.

You can't put any more than £100 into it in any one month, so if you have a big 'balance you want to transfer' at the start, it's not going to fit inside the allowance for that first month.

It could however just sit in another account (like the "young saver" account), where it would earn interest at 3% until it was time to move it over into the "regular saver" account as soon as you had capacity the next month.

You don't get the 6% you are expecting. I was told by their adviser that it actually reduces throughout the year down to zero and you end up with only 3% so you might as well open up their normal kids saving account which pays 3% and is not restrictive like the regular saver. The regular saver transfers into this account anyway after 12 months.

This is either a bad explanation from him or a bad understanding from you. Here are some of the facts on the website which are not misleading at all:

* Pay in any amount from £10 to £100 each month by standing order
* Interest paid on maturity after 12 months
* Interest rates are fixed upon opening the account - check in branch for the current rate
* Fixed rate of interest – the rate we pay is fixed and will not change throughout the 12 month term

So, the 6% rate is entirely fixed. It doesn't "reduce throughout the year down to zero". Every single month it literally pays 6% a year (in otherwords, 6% times the number of days in the month, divided by the number of days in the year), multiplied by however much is in the account.

At the start of the year, you only have £50 in there and don't earn very much interest that month even though 6% is a great rate. You only get about 25p that month.

By the end of the year, if you have continued to put in £50 a month, you have £600 in the account, earning 6% on for that last month. So in the last month you get £600 x 6% x 1/12 which is a nice £3. If you could have had £600 in the account for the whole 12 months, you would have earned £3 x 12 which is £36. £36 is 6% of your £600.

But, that £600 isn't sitting in the account all year. You are only dripping into it gradually. In the month before the last month, you only had £550, so you don't earn the full £3 that month, you only earn about £2.75. In the tenth month, when you only have £500, you only earn about £2.50. In the ninth month you only have £450 deposited in the account, you only earn £2.25. So when you add up all the £3 + £2.75 + £2.50 +£2.25 and so on back to £0.25p in the first month, you are obviously not going to be able to get as much as £36 in the whole year.

So, when you look at the amount of interest earned, which they say on the website is about £19 over the year, you are not earning that after depositing £600 for a whole year. You had £600 at the end, but you only had £50 at the start. If we looked at the balance every day of the year, we could say that averaged over the whole year, you had a little bit more than £300 oustanding, on average. It starts at only £50 and goes up to £600 so on average it's somewhere pretty much in the middle of those two numbers. Let's agree that on average there is £320 cash in the account. 6% of that it £19 which is what the website says you get paid. So, you are getting paid 6% on all the money you actually had in the account with no tricks.

Your issue, if you have a nice big lump sum but only want to feed it slowly into the account at £50 a month (instead of say £100 a month for 6 months and then stop), is that you don't have all your money working for you in the regular saver account at the high rate. Only about half of it is working for you in that high rate account. The rest of it, is sitting in the child's "young saver" account or your own personal account. But you are still getting paid interest on that separate pot of money while it waits to get fed in.

Above, I said that there was about £320 in the account on average over the year. So if you really had £600 in total in the child's accounts, but on average only had £320 in the regular saver account because it took a while to drip in, you must have had £280 on average in the other "young saver" account, waiting to drip through.

So, on that £280 average for a year at 3% you would make £8.40. On the £320 average for a year at 6% you would make £19. Altogether you make £27.40 (I'm doing some rounding to keep it easy). If you had just used the "young saver" account for the whole £600 for the whole year, you would have got £18. So it seems to me, that by using a combination of the two accounts, you get about one-and-a-half times as much interest as if you had just put all the money into the young saver account and left it there.

I am sure Halifax are happy for you just to put all the money into the lower interest account for a whole year and leave it there, because it costs them less. They are willing to let you have a better rate on whatever you drip through into the regular saver, but if you turn it down because you can't be bothered with the hassle, it's no skin off their nose, at least they offered it. Remember that the £27 on offer doesn't sound much but that's only putting half the maximum into the account. If you had twice as much money you would be able to earn twice as much interest - over £50 of interest for your child in a year. For each child you have.

I had a "discussion" with their chap saying that the website is completely misleading and the only way you know you're not getting the headline rate is their example which says if you pay in £50 each month then at the end of the year you get £18.97 gross interest.

From the way you explain this, I'm sure it was quite a one-sided "discussion" where you basically scolded him and 'educated' the chap that you were right and he and his bank were wrong and you can't possibly be earning 6% if you only earn £19 on £600 after a year. He probably nodded along and was so brow beaten he was happy to see you leave. But the reality is the £19 would be earned on an average cash balance of much less than £600, while you also have the rest of the money sitting somewhere else earning interest. So it is entirely true what they are offering you is 6% per year on all cash in the account, for whatever proportion of the year that the cash is actually in the account.

I wasn't impressed with their marketing to say the least.

But that is because you don't understand how to calculate interest entitlement or what a regular saver account is. They do explain it in quite plain English. When you say 'the only way you know you're not getting the headline rate'... if you do the maths yourself on what is deposited when, you can see that you are getting the headline rate.

Maybe they should also tell you how much money you are earning on the cash that did not spend most of its time in the regular saver account because it was sitting in another account ready to move across in the last few months of the year. However, they don't know what other accounts you hold. As you can see from the above, if you had a combination of a 6% regular account being fed by a 3% fixed account, you would do quite nicely (the overall £27 earned on the £600 after a year works out to about 4.5%, right between the two rates)

That said the 3% normal saver is a good rate.

It is, it just isn't as good as the 6% regular saver. If you put as much money as you're allowed into the 6% account, and meanwhile keep the rest in the 3% account, you will do very nicely.


edit - for the short version, check out Archi's reply which he sneaked in while I was waylaid by cooking dinner!