Are Halifax having me on?

Mimi_Arc_en_ciel

My 2 children have a regular savings account (6%) and its coming up for a year. I asked on here what to do about it but when I went into branch to discuss things they said I would lose out.


After a year, their regular savings account transfers into a young savers account (3%)


I asked them about setting up a new young savers account, transferring the money from the regular savings account and then keeping on the regular savings account starting a fresh with the new 6%


Halifax said I would be missing out and that I would be better just letting it go into a young savers account and putting money direct into there because we would get "more for our money"


I'm confused! can someone help?

Archi_Bald

Use the regular savings calculator to work out the actual return potential from a regular saver. You'll get most mileage out of it if you can drip feed, e.g. from a normal savings account.

http://www.moneysavingexpert.com/savings/best-regular-savings-accounts#calculator

Ask the Halifax guys to give you the detailed numbers that prove what they are saying. Should be interesting to see what they come up with....

Mimi_Arc_en_ciel

Sorry to be dumb.... I've never done drip feeding before... Have just read the MSE guide and I get that I put the savings my children have already into a high interest rate account (In this case, the young savers at 3%) and then move the money each month into the regular savings (at 6%) - But what do I do about my direct debit? Does that go into the 3%?

Archi_Bald

It's a bit difficult to cover all the possible options without knowing what the amounts involved are.

I haven't read up the details of depositing money into each of the accounts so don't know how best to move money around.

If you want to continue to add new money to your child's accounts, you might exceed the total amount the Regular Saver takes. But then again, you might not, and just feeding the 3% account by DD, and then moving the appropriate sum once a month to the 6% one, might be the right thing to do.

You could consider the Halifax JISA for any surplus money if your child qualifies for a JISA, and if the money can be locked away until the child is 18.

Archi_Bald

You can figure out whether a JISA would be a good option by reading up about JISAs, and determining whether they are right for your kids.

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

The advantages if JISAs would include that you don't need to be concerned about annual interest going over £100, as all JISA interest is tax free. Whilst in normal savings accounts, any interest above £100 will be taxable at your tax rate.

But as mentioned earlier, money in JISAs will not be accessible until age 18.

As of today, the annual JISA limit per child is £4,000.

AlwaysLearnin

The only thing I can think of is if your payments in to the Reg Saver are set up quite a while after the opening/anniversary date/day. For example, if the regular saver started/renewed today, but your payments weren't set up to go in until mid/late July, then you wouldn't be maximising the amount of time you're getting the 6%.

If not, I'd ask them to explain why they thought that you're missing out. To clarify, are you using 'new' money to fund the regular saver, or recycling the previous years savings from the Young Saver?

Mimi_Arc_en_ciel

AlwaysLearnin wrote: »

The only thing I can think of is if your payments in to the Reg Saver are set up quite a while after the opening/anniversary date/day. For example, if the regular saver started/renewed today, but your payments weren't set up to go in until mid/late July, then you wouldn't be maximising the amount of time you're getting the 6%.

If not, I'd ask them to explain why they thought that you're missing out. To clarify, are you using 'new' money to fund the regular saver, or recycling the previous years savings from the Young Saver?

The interest rate started on the day I opened the account and runs for 12 months, its due to finish in August.


I'm using "new" money - have standing orders coming from my personal bank account into their savings account each month (both only have around a grand in there at the min, so very small figures, but I started saving late - eldest is nearly 7! - and I'm just trying to do what's best for them to maximise the savings I can provide. I figured that on their 16th birthday I could potentially save £11k each for them)

xylophone

Bear in mind the £100 rule if saving for your child outside tax privileged accounts like CTF/JISA

http://uk.virginmoney.com/virgin/savings/learn/childrens-accounts/

AlwaysLearnin

I don't know what they're getting at then. I'd ask them to explain why. My experience of branches is such that I don't have much faith that they're right, but just in case I'd be interested in their response as we use their Kids Regular Saver too.

PeacefulWaters

The Halifax staff are being lazy and can't be bothered with opening up a new Kids Regular Saver account.

Too much effort and no bonus payment for them.

Money_maker

From what I remember, they send you a letter when the account is due to mature. You have the option to continue with a new Regular Saver without any effort on the part of the branch. My SO just remained unchanged.