Account for an almost 18 year old.

Robisere

Hi everyone, been on the site for yonks but this is my first request for financial advice. We have 4 grandchildren aged 20, 17, (the 'almost 18' one) 15 and 9. We setup a NW ISA for each one a few years ago, the 20 year old has already put his into a current account, he is working. our eldest gd is going to be 18 very soon and I have given her situation a great deal of thought. She is doing very well at a local College, in Hospitality & Catering and wants to be a chef, which I have no doubt she will be as she is bright, hard working, super-confident and is almost a year ahead of her fellow students. She lives in a rural village and will need driving lessons and a small car, so I am considering the following:

Put all of the ISA funds (£2700+) into her (present) Barclays account, which is a simple Cash card account, then switch to an under-19's TSB account, which pays 2.5% for all funds up to £2,500. This account also has perks for young people, including good discounts for the AA Driving School, and a CD ROM "How To Pass".

Later, when she is at work, switch this to a "Classic" TSB account, which pays 5% interest. Her salary will then be paid into that account. I have to emphasize that she will need the money almost immediately, in order to take driving lessons and buy a car. She lives 24 miles from her College and already has a part-time job at a restaurant, 3 miles from home, where she is highly regarded by the owner and his wife. He took pains to tell me this personally: I am currently taking her to work and back, as my son her dad is a single working parent, with a 15 year old son as well.

I have looked at other accounts, but this one seems the best way to give my lovely, determined gd a great path to adult banking. What does anyone else think?

EDIT: I don't need any advice regarding choosing a car; I am an ex-workshop foreman and have many contacts in the trade.

Archi_Bald

Sounds generally a good plan though you/they should not leave any money sitting in a bank account without earning interest.

I believe Lloyds have a copycat account to the TSB one, and the Santander 123 mini is 3% on between £300 and £2,000. So might be worth splitting the money between the two.

knack92

Sounds like a reasonable plan to me assuming she is happy to change her current account arrangements.

xylophone

What does your granddaughter ( the soon to be of age recipient of the gift) think?

Have you discussed it with her?