Best savings for childern ?

sydney2002

Hi folks, and happy new year too.
Our child is now 16, we had a halifax kids savings account, which has now expired due to reaching the age of 16. We are looking for some advice/guidance on what is best to do with the £££ it is a substantial amount.

Any help/advice, appreciated.

Archi_Bald

As you didn't say how much money is involved, or what the purpose of the money is, it is difficult to make any concrete suggestions.

Assuming the money will be spent some time in the next 5 years, it should be kept in cash savings. If you want a single account, you won't get much interest. If you are prepared to split it, you might get better rates. E.g. £4,080 can go into a Halifax JISA (3 or 4%)now, and the same again in after April 5. There are also Youth current accounts that pay relatively decent interest on up to £2K or £3K. Some could probably also go into an HTB ISA.

sydney2002

Archi_Bald wrote: »

As you didn't say how much money is involved, or what the purpose of the money is, it is difficult to make any concrete suggestions.

Assuming the money will be spent some time in the next 5 years, it should be kept in cash savings. If you want a single account, you won't get much interest. If you are prepared to split it, you might get better rates. E.g. £4,080 can go into a Halifax JISA (3 or 4%)now, and the same again in after April 5. There are also Youth current accounts that pay relatively decent interest on up to £2K or £3K. Some could probably also go into an HTB ISA.

Its £10,000 to invest.
We were looking at the Nationwide Junior ISA, seems best payer at 3.25% ( same as coventrry also ) . Placing the £4080 for 15/16 allowance, then same again come april for the 16/17 allowance.

cloud_dog

Legally the money is the child's so, the question to ask is.... What will the child do once they have access to the money?

Depending on the answer, you may want to look in to splitting some/all of the monies in to 2, 3, 4 year fixed rate bonds / accounts (you get the idea).

sydney2002

cloud_dog wrote: »

Legally the money is the child's so, the question to ask is.... What will the child do once they have access to the money?

Depending on the answer, you may want to look in to splitting some/all of the monies in to 2, 3, 4 year fixed rate bonds / accounts (you get the idea).

Yes we undertand that come 18, the ££ is theirs and can do with it what they want. Prefer to hold it so at 21 its given to them.

Fixed rate bonds ???? Who is that with ?

cloud_dog

sydney2002 wrote: »

Yes we undertand that come 18, the ££ is theirs and can do with it what they want.

Forget 18, the money is legally theirs now (even before now).

Putting it in an ISA would lock it away until they are 18 but in two years time your decisions may be taken out of your hands.

What I was trying to get across was to consider the bigger picture now rather than just grabbing the best rates.

Only you know your child so, this aspect may be a bit of a mute conversation.

EDIT: Just to say that some/most adult savings accounts allow for the account to be opened from age 16. Therefore a number of fixed term accounts become available to you. Again, these may not be the best rates available but something to consider.

xylophone

Your child having reached the age of 16 ( so no need for the parent to have an ISA with Halifax to get the top rate) can open a JISA with the Halifax for himself now and get 4% interest on £4080.

http://www.halifax.co.uk/isas/cash-isas/

The balance could be held in a Nationwide Smart Limited Access and £4080 withdrawn on April 6 to be deposited in the ISA, with the balance withdrawn the following April.

http://www.nationwide.co.uk/products/savings/smart-limited-access/features-and-benefits

mel48rose

xylophone wrote: »

Your child having reached the age of 16 ( so no need for the parent to have an ISA with Halifax to get the top rate) can open a JISA with the Halifax for himself now and get 4% interest on £4080.

http://www.halifax.co.uk/isas/cash-isas/

The balance could be held in a Nationwide Smart Limited Access and £4080 withdrawn on April 6 to be deposited in the ISA, with the balance withdrawn the following April.

http://www.nationwide.co.uk/products/savings/smart-limited-access/features-and-benefits

Would the interest be tax free?

cloud_dog

mel48rose wrote: »

Would the interest be tax free?

As long as the child isn't receiving/earning income greater than their personal allowance it would (can) be.

EDIT: that relates to the NW account. Plus from April 2016 you get the Personal Savings Allowance on savings (funnily enough)

sydney2002

xylophone wrote: »

Your child having reached the age of 16 ( so no need for the parent to have an ISA with Halifax to get the top rate) can open a JISA with the Halifax for himself now and get 4% interest on £4080.

http://www.halifax.co.uk/isas/cash-isas/

The balance could be held in a Nationwide Smart Limited Access and £4080 withdrawn on April 6 to be deposited in the ISA, with the balance withdrawn the following April.

http://www.nationwide.co.uk/products/savings/smart-limited-access/features-and-benefits

It says the below on teh Halifax ISA
" 4.00% tax free/AER variable if an adult cash ISA is held or child is 16 and over. If an adult Halifax Cash ISA isn’t held, the standard Junior Cash ISA rate (3.00% tax free/AER variable) will apply"

We do not have an ISA with Halifax, so we would not get the 4.00 rate. OR, does the fact the child is already aged 16, mean they get the 4.00% rate anyway ?

Flobberchops

Yes Sydney I believe the latter is correct. Child is over 16, rate rises to 4%. Tell them to enjoy it, once they're a grown adult those kind of rates are hard to find!