A & L Slash Child Account rates

deefadog

I jut found this account wth he Coventy BS - click here

According to the Motely fool's it' the best around by far!

Here is the info

Family 1st is a new, innovative instant access savings concept designed especially for mums and dads. It pays an unrivalled 7.25% AER/gross p.a. (fixed for the first year) on your Child Benefit money - helping that money go as far as possible.

What’s more, you’ll also benefit from a fantastic 5.25% AER/gross p.a. (variable ) on any other money you save in Family 1st.




The only problem i have is that it's two seperate accounts that are linked! one for the child benefit (7.25%) and one for any other savings (5.25%).

So all the combined money will not be working together.


so what is best?

1) Have -

£68 per month going into the (7.25%) account

and £34 per month going (and around £400 a year extra for birthdays) into the (5.25%).

or

2) £102 (and around £400 a year extra for birthdays) going into a (5.25%) account?

I need a guru now to tell me which is the best deal for me ( I have worked it out that the combined will make me £16 better off per year) But i need this confirmed as i am not the best at tis sort of thing

Thanks for any advice

FIFE1

By all means open the Coventry Family First, I have although I don't know if you can do this in trust. Be interesting to know. They automatically open the other savings account which the Family First money will clear into at the end of the year and then the interest rate drops a bit for year 2. You can do a lot better than 5.25% on the other savings accounts - I've opted for the Derbyshire BS at 5.85% and I've already posted details above. Good Luck

MarkyMarkD

FIFE1 wrote:

By all means open the Coventry Family First, I have although I don't know if you can do this in trust. Be interesting to know. They automatically open the other savings account which the Family First money will clear into at the end of the year and then the interest rate drops a bit for year 2. You can do a lot better than 5.25% on the other savings accounts - I've opted for the Derbyshire BS at 5.85% and I've already posted details above. Good Luck

Even if you can open it in trust, the child benefit is your income not the child's and hence it will be taxable if the interest exceeds £100.

That said, at around 7% you would need £1400 to get £100 of interest, so it won't become a problem for a while.

deefadog

I never thought of that! opening it in trust i automatically assumed that as it was, advised by the motely fool news letter as being the best child savings account around by far!

I will check this out! if it can it is the combined still works out better then 5.85%!

So as the child benefit is ours, what's the best options as far as saving for our child? as adding only £32 per month gives £100 per month (£1200 per year) but want to avoid tax as it is not for us!

Ideally we want to save around £1500 per year or more - after the magical componding it should be a nice lump some in 18 years time!

MarkyMarkD

The best option is to save as much money as you can, for your child, which is given by others. If they get gifts from grandparents, uncles or aunts, save that money (and keep a record of who it's from if you want to be hyper-careful) and spend your own money instead on the child.

If you want to save on behalf of your child, you should save in trust up to the £100 limit (interest, not balance) and then use your ISA allowance if you aren't already doing so for yourself. After that, I've run out of thoughts FTTB.

deefadog

I see thnaks, so for the first year the child benefit will be ok to go in, as we are not going to hit the £100 interest. From my workings out at 5.85% you would need a little over £1600 balance.

So from that point on it will be taxed? is this right, so we should withdraw the money and put that into an ISA and start to save the £1600 in out daughter acount again! Is this right?

But if all the money saved comes from her grandparents will the £100 limit be applicable?

Spendless

deefadog wrote:

I will check this out! if it can it is the combined still works out better then 5.85%!

So as the child benefit is ours, what's the best options as far as saving for our child? as adding only £32 per month gives £100 per month (£1200 per year) but want to avoid tax as it is not for us!

Ideally we want to save around £1500 per year or more - after the magical componding it should be a nice lump some in 18 years time!

Do you not qualify for tax credits? Even if only the family element you would still get £545 could you not add this?

deefadog

Yes we do get tax credits, but this is to make up the wife's part time wages!

Where does the £545 come from?

Basically

1) We have £1500 a year to put away, £816 of this is child benefit.

2) We don't want to pay tax (as it is not for us)

3) We want to save this for the next 18 years (componding the money to a nice lump sum for first car, wedding etc)

I just need to know the best way of doing this!

Thanks (gone a little off track, but may help others in the same situation)

Annabee

If savings accounts written in trust for children are STILL taxable as parents' income if interest is more than 100 pounds pa, this makes me :mad:

The government has introduced Child Trust Funds for kids born in the last couple years - what are we supposed to do about saving for our older kids with all the extortionate university fees etc this government has introduced?

The only other option are Children's Bonus Bonds from National Savings (tax-free, apparantly) - but they pay a rubbish 4.1%.

Discrimination against older kids!!!!

pthompson

Rather than closing the account (the day before the rate drops in July), can anyone see any problem with just withdrawing everything except 1p (to spite them)?