Putting a child's savings into an adult's account?

LocoLoco

Hello all,


There seem to be some current accounts paying good interest rates at the moment, Nationwide and TSB in particular.


My son (he's 12) has about a thousand pounds in a Little Rock account which pays about 3% gross. If I were to open a TSB account (which I believe is 5% at the minute) is it okay to put his savings into it or is there some rule against that?


Paying tax on the interest wouldn't be an issue as I don't earn enough to pay tax myself. I'm good at keeping track of money and we're on a tight budget so there's no risk of me spending his money by mistake.


Sorry if it's a daft question, I'm quite new to the site and all things money related are still a bit of a learning curve for me.

xylophone

Your child's money is his and should be kept separate from yours.

If the money were in an account in your own name then it would be regarded as your money in the event that you were seeking means tested benefits.

Was your child born before 1 September 2002? https://www.gov.uk/junior-individual-savings-accounts/overview

If so, had you considered opening a cash ISA for yourself with Halifax so that your child would be eligible for the 6% JISA?

http://www.halifax.co.uk/isas/cash-isas/junior-cash-isa/?srnum=1

LocoLoco

xylophone wrote: »

Your child's money is his and should be kept separate from yours.

If the money were in an account in your own name then it would be regarded as your money in the event that you were seeking means tested benefits.

Was your child born before 1 September 2002? https://www.gov.uk/junior-individual-savings-accounts/overview

If so, had you considered opening a cash ISA for yourself with Halifax so that your child would be eligible for the 6% JISA?

http://www.halifax.co.uk/isas/cash-isas/junior-cash-isa/?srnum=1

Ah, ok, I see what you mean, I hadn't thought of it from that perspective. Many thanks for the info.


Will look into the junior isa; there isn't a lot that I could put in it long term but may be able to put a small amount away for him, many thanks for that.

FireWyrm

Probably doesnt apply, but something to think about anyway. There has been at least one sorry story where a parent has deposited money for the child in their own account and the bank has regarded it as the adults' money and 'appropriated' it to pay off a debt elsewhere. Despite protestations, the bank wouldnt budge and they lost the money in the end. You may not be in financial difficulty right now and life might be rosy, but this can happen and should be a consideration.

societys_child

Thing that worries me, that 6% junior cash ISA is variable and no withdrawals until 18. If they drop the rate to 0.5% your slightly screwed . . .

LocoLoco

FireWyrm wrote: »

Probably doesnt apply, but something to think about anyway. There has been at least one sorry story where a parent has deposited money for the child in their own account and the bank has regarded it as the adults' money and 'appropriated' it to pay off a debt elsewhere. Despite protestations, the bank wouldnt budge and they lost the money in the end. You may not be in financial difficulty right now and life might be rosy, but this can happen and should be a consideration.

Thank you for that, something else to keep in mind! Many thanks.

LocoLoco

societys_child wrote: »

Thing that worries me, that 6% junior cash ISA is variable and no withdrawals until 18. If they drop the rate to 0.5% your slightly screwed . . .

Thank you, something else I hadn't thought of! Many thanks for all the info, will keep reading!

xylophone

Thing that worries me, that 6% junior cash ISA is variable and no withdrawals until 18. If they drop the rate to 0.5% your slightly screwed . . .

You could transfer to a provider offering a better rate.

https://forums.moneysavingexpert.com/discussion/comment/65201407#Comment_65201407 post 4

societys_child

xylophone wrote: »

You could transfer to a provider offering a better rate.

https://forums.moneysavingexpert.com/discussion/comment/65201407#Comment_65201407 post 4

Possibly, I haven't waded through the T&Cs, but the Halifax junior ISA is dependent on the adult ISA, so would this be straight forward?

and your post (which you linked to) states:

Note that Junior ISA managers are not obliged to accept transfers

dr_adidas01

What about putting it in a Santander 123 mini current account?
Sure it only gives you 3% on balances from £300 to £2k its still better than nothing. It can also be opened in the child's name.

http://www.santander.co.uk/csgs/Satellite?appID=abbey.internet.Abbeycom&c=Page&canal=CABBEYCOM&cid=1210609166115&empr=Abbeycomd&leng=en_GB&pagename=Abbeycom%2FPage%2FWC_ACOM_TemplateW2

LocoLoco

Thank you for all the info, the account he has pays 3%, it was simply because I saw these current accounts paying more that I wondered if I could put it in one of those but can see why keeping the money separate makes more sense.