Which Halifax account for new baby?

downhillfast

Morning!

I just need a bit of help as my brain is suffering badly through severe lack of sleep due to a new addition to our house!

I am wanting to open a bank account for our new baby and have decided that Halifax is the best option - unless anyone can suggest otherwise? At this stage we are looking for a bank account that he can access the funds without it being locked away for 18 years - I'm going to invest in a S&S JISA once finances are stabilised after DW returns to work from maternity leave.

There are 2 Halifax accounts - one pays 6% for first year (before automatically switching to the other account it then pays 3%) but will only accept a max deposit of £100 a month - he already has £500 sitting here ready to bank!
The other account pays 3% and we could deposit all of his money straight away...

I just can't work out which account i need to open to maximise his interest as it would take a few months to get his money into the higher rate one???

grumbler

Unless you are going to add more than £100 each month in the nearest future, the lost interest on £400-£300-£200-£100 for four months is negligibly small. All high-interest accounts have restrictions, so it's a norm to drip-feed them from other accounts if you want to maximise the interest. I guess nothing stops you from having both accounts for a while.

MSE article:

• Top Childrens Savings

pinkdalek

If you have nothing to start with and are going to save £100 per month then the reg saver at 6% is worth considering, however you cannot access it until 12mths. It will make you approx £30 in interest.

If you already have £1000 for example you could deposit into the young saver at 3%, hope the rates don't drop and get £30 in interest in 12mths time. Plus you have access and can pay in as much or as little each week/month as u like.

If you are only saving £10 per month as an example the difference in interest you would get on 3% and 6% is not much as you're only staring off with a small amount.

JISA is an option for the future when your finances are more settled, more long term savings and they are transferable between JISA providers so you can switch if someone else offers a better deal in the future.

Lungboy

I'm in a similar situation (baby due in 3 weeks) and have just been reading up on these products, so I'm interested in what people suggest. Annoyingly, the MSE Junior S&S ISA article appears to be 4 years of out date.

jennifernil

We have both for our grandchildren.

Put the lump sum into the 3% one and pay monthly into the 6% saver, either using new money or from the £500.

At the end of the 12 months the proceeds of the monthly saver will be paid into the Young Saver and you can start a new monthly one if you wish.

King_Slayer

downhillfast wrote: »

Morning!

There are 2 Halifax accounts - one pays 6% for first year (before automatically switching to the other account it then pays 3%) but will only accept a max deposit of £100 a month - he already has £500 sitting here ready to bank!
The other account pays 3% and we could deposit all of his money straight away...

We registered our daughter for the Halifax Kids Regular Savers account which had to be done in branch. It offers 6% AER we can save up to £100 monthly and money including interest is automatically transferred to a nominated account (Young Savers 3% AER) after the term. You can instruct for the account to restart the following year.

However we later had an issue as the person who set up the account (thought maybe he was new but apparently not), did not register the account to be exempt from tax (even though we had to provide birth certificate etc and it was a Kids Saver), we therefore got taxed on the account two years running. We were sent a letter from Halifax stating the amount of taxed charged and the 0845 number to contact HMRC to claim it back (which I haven't done as yet).

We currently save with a range of providers and this account offers us the best interest rate for her savings. For larger savings we currently use the Halifax CTF which is invested in the FTSE 100, this has gone well for her but much greater risk. Good Luck choosing:)

Westie983

Hi,

the halifax kids regular saver (6%) allows you to fund between £10 - £100 a month, for 12 months then the money is swept into a young saver account (3%) which is opened at the same time if you don't have one. as mentioned you have £500 ready to bank so you can put £100 in regular saver, then the £400 into the young saver. You will then have a decision to make.

Option 1. fund the regular saver with £100 from another source (current account) by standing order or faster payment and keep the £400 earning 3% for a year.

option 2 you have to go into branch each month and take £100 out of the young saver and put it into the regular saver, thus reducing the amount in the young saver at 3% and increasing the regular saver at 6% for the next four months. by October you will have reduced the money from the young saver and its now in the regular saver an you can continue to just fund the regular saver till 12 months have passed.

You are not able to set up standing order from a young saver so if you wish to do the second option you will need to remember to withdraw the money each month and pay it in. if you forget to fund the account with between 10 - 100 then you will lose the 6% interest.

The first option will mean you can fund the regular saver by standing order or faster payment whenever you want without having to go into branch each month.

The terms and conditions have changed in the last year that now allows you to make additional deposits as long as you don't exceed £100 a month, where as previously it was only one credit a month, this means you are able to fund any christmas or birthday money into the account.

As mentioned the young saver and regular saver needs to be opened in branch so you can ask the advisor if you have any questions.

joe134

Same as all my kids/grandkids use;;
Bancopops.
ME.:rotfl:

Purplesky_2

As an aside, a second choice or addition could be a children's bond from the ns&i.
http://www.nsandi.com/childrens-bonds

I had five of differing values and ended up with enough money to cover a period of sickness at the end of uni without dipping into my own savings.

When I got shown them at 16, the impact of compound interest really made a mark on me. Even if you just buy them with, I dunno, christening money or birthday money early on, they can make a huge difference and they aren't a big 'investment' (starting from £25).

PeacefulWaters

Purplesky wrote: »

As an aside, a second choice or addition could be a children's bond from the ns&i.
http://www.nsandi.com/childrens-bonds

I had five of differing values and ended up with enough money to cover a period of sickness at the end of uni without dipping into my own savings.

When I got shown them at 16, the impact of compound interest really made a mark on me. Even if you just buy them with, I dunno, christening money or birthday money early on, they can make a huge difference and they aren't a big 'investment' (starting from £25).

Which do you think is best?

2,50% fixed for five years.

3.00% with easy access.

6.00% fixed for a year.

pinkdalek

PeacefulWaters wrote: »

Which do you think is best?

2,50% fixed for five years.

3.00% with easy access.

6.00% fixed for a year.

Depends on what you have to invest, but 2.5% fixed for five years is a safe option in the current climate if you want security and not looking to risk in investments. Also this is money for your child which is planning to be given to them when they are older e.g. 16/18/21, so the most important factor is they get something that a lot of us never got.
Look at it logically, interest rates are not likely to rise in the next year and if they do it will be gradual and the trend with banks is the rates they offer are lower than what they were 2 or 3yrs ago (eg cash ISAs) It would take significant rises over a short period for it to affect you fixing money for 5yrs. Seeing as the base rate has been static for 7 yrs it is not likely to be volatile overnight. Don't forget that the 3% instant access can be lowered at any point, and when it is will the fixed 2.5% be available?

Even if rates rose significantly, it may even be worth closing the fixed account early as a better rate may compensate the penalty.

With banks being given money from BOE at 0.5% under the funds for lending scheme, they will not offer lucrative rates for savers.
Children's savings may be higher, however this is to encourage children to save, plus the restrictions on what you can put in means in real terms it doesn't make a massive amount. (unless you are fortunate to be able to put £20k in a young saver at 3%) and lets be honest this is not a stereotypical, working class family who are able to do this.