Best type of account to open for a child

amalis

Please help me as I am very confused. We want to open a saving account for our newborn. Basically, hte idea is to open an account where we can add money every month/ year and it would be only for the little one to cash when he is grown up. i am very confused between Junior ISA and simple saving account/... what is hte best?

Mimi_Arc_en_ciel

amalis wrote: »

Please help me as I am very confused. We want to open a saving account for our newborn. Basically, hte idea is to open an account where we can add money every month/ year and it would be only for the little one to cash when he is grown up. i am very confused between Junior ISA and simple saving account/... what is hte best?

There's a few things to look at.

Firstly how much are you thinking of putting away? (I ask because some regular savings account - Like the Halifax Regular 6% account - have a £100 limit per month.

Secondly - whilst only a newborn now, do you really want him having access to £XXXX at the age of 18? No one can predict what their kids will be like, and whilst we all like to imagine they will become sensible adults, that doesn't always mean that they will.

The top jISA rate is 3.25% - As I said above, the Halifax gives 6% on its regular savings account for a year. You then transfer it to a Halifax young savers when it matures then restart the year with the 6%

This guide is handy: http://www.moneysavingexpert.com/savings/child-savings-tax-free


and also the JISA one: http://www.moneysavingexpert.com/savings/junior-isa

xylophone

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

The JISA is not subject to the £100 rule. The money belongs to the child who has the right to control at 16 and access at 18.

See http://uk.virginmoney.com/virgin/savings/learn/childrens-accounts/ Things you might like to know.

The money in accounts like the one above belongs wholly to the child.

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/families/babsi.htm

You could regard your own ISA as "earmarked" for your child but remember that the money remains yours and would be taken into account if you needed means tested benefits.

You might consider regular saving into an investment trust "designated" for your child (rather than held in bare trust) but the same applies re ownership and means tested benefits.

See http://www.sit.co.uk/private-investors/products/stockplan-a-flying-start and click on FAQ.

Pinner_Ram

I was recently made a great uncle (I told my nephew that I'd always been a Great Uncle!) and my nephew told me, with some satisfaction, that he'd got his daughter a savings account paying 6% pa. interest - I said well done.


I then said, are you going to take the better option with future monies and put it into a low fee global equity tracker fund in a junior isa adding to it regularly for her long term security?


His smile vanished until he got it.


PR