Advice on Child Trust fund V's High Interst Account

jeekster

What you would do?

I am just about to open a Child Trust Fund (Yorkshire 7%ish) and a regular Savings Account with Halifax (10% for first year) for my daughter.

Is it best to save with CTF (tax free) for this first year at 7%ish or with Halifax 10% (£100 per month of 1 year = £1200 - will my child be taxed on this?). My thinking is that after 1 year I can then lump all the money saved with Halifax into the CTF (as the interest rate then goes down with Halifax).

Hope I'm making sense, I'm confused myself.

Does this sound like a sensible thing to do or am I missing something? Any advice, opinions are welcome.

Thank you!

TheWaltons_3

Personally, I have 3 CTF accounts but seeing as when they're 16 (or whenever they get it) they can blow it one what they like, I would prefer to top up another high interest savings account that they can't access until they are older.

heather38

children don't pay tax until their interest goes over a certain amount.
personally i would use a high interest account rather than a ctf for saving, as once the money is in the ctf you can't take it out again, but a savings account means that if you need to access the money, such as when they 'need' a new playstation or whatever you can get at the money.
i have the brittania ctf and the halifax account as well (well 2 halifax accounts as you have to have both the childrens accounts if you have the high interest one)
the halifax one is a funny thing, you save at high interest for 1 year then they move the money plus interest into the other account, and the high interest one starts again from the beginning and you can only save in this account if you pay by direct debit, so you can't put birthday/christmas money in it. hth