Baby Savings

xxblotxx

Hi,
All of the JISAs & savings accounts for children really confuse me.
I'd like to open some sort of savings account for my 2 month old which I'd like to pay in £1 a day in to until she turns 21 (£30 per month)
What would be the best option for me to go for for something like this.

I received a large sum of money at 18 and wasted it so I'd like my daughter to receive the money at 21 (after graduating/for a house/car etc.)

Hope someone can help

Thanks!

xylophone

There is no guarantee that a 21 year old will be more responsible than an 18 year old!

If you make a gift of this money to your child, and hold it in bare trust for her, she has the absolute legal right to access and control at the age of 18, (16 in Scotland).

It would be open to you to hold the money in bare trust until shortly before her 16th birthday and then deposit it all in a five year bond - she would still have the right to access and control at the age of 18 but the penalty for early withdrawal ( even if the terms of the bond allowed it) would be likely to be so punitive as to put her off.

Bear in mind that as this would be an gift to a child by a parent, (outside a tax privileged scheme like a JISA), the "£100 rule" would apply in respect of interest.

https://www.gov.uk/savings-for-children

If you used JISA, the child would have the right to control at 16 and access at 18.

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

Otherwise you might consider your own ISA as "earmarked" for your child and make gifts from that whenever you chose.

In view of the long time period, you might wish to consider the stockmarket option over cash?

An investment trust savings plan can be held in a "designated" account ( in which case it is still beneficially yours) or in bare trust when the child is the beneficial owner.

It might suit your purpose? An example here

http://www.sit.co.uk/private-investors/products/stockplan-a-flying-start

Look at the FAQ immediately above "Investing for Children" where details of both forms of holding are explained.

For child savings etc see

http://www.moneysavingexpert.com/savings/child-savings-tax-free

EdGasket

it's best to let youngsters earn their own money. Giving them money, although well intended, does not always have the desired consequences. Why not set money aside so that you are in control and then offer help to your daughter if/when she needs something specific?