15 year old sons savings?

william1872

Hi all,

We currently put £120 per month into a cashbook for our son, to be honest I get confused with the rates and what's the best interest rate account to go for? He's not getting this money until he is 21 and at the moment there is £4000 in total, we currently use the Nationwides cashbuilder book for him, can anyone advise of a higher rate account for us to transfer?

one other thing, interest is normally paid at the end of the year, would we need to wait until then before transferring the money to another account? am I right in thinking he only gets 2.4% per year in interest?

here's the rates for nationwide

CashBuilder Book
Instant access account with passbook

Effective from: 01/08/2007 £1 - £9,999 2.40 n/a 2.40 1.92
View leaflet
£10,000 - £24,999 2.70 n/a 2.70 2.16 £25,000 - £49,999 3.00 n/a 3.00 2.40 £50,000+ 3.30 n/a 3.30 2.64

The_Fiddler_2

You could put it in the Nationwide E-savings at 5.8% or there are other e-savers with higher rates.

gt94sss2

william1872 wrote: »

We currently put £120 per month into a cashbook for our son, to be honest I get confused with the rates and what's the best interest rate account to go for? He's not getting this money until he is 21 and at the moment there is £4000 in total, we currently use the Nationwides cashbuilder book for him, can anyone advise of a higher rate account for us to transfer?

one other thing, interest is normally paid at the end of the year, would we need to wait until then before transferring the money to another account? am I right in thinking he only gets 2.4% per year in interest?

Yes, at the moment your son is only getting 2.4% interest which is quite poor.

You can close the account at any time and any interest earned to date will be credited to the account - you don't need to wait until the end of the year.

As for alternative accounts:

The Nationwide Smart account pays 6.04% AER so at the very least you should transfer the funds to that.

Halifax also pays children 10% in a regular saver account (upto £100/month) which may be a better place to put £100 of the £120 you are saving for your son every month. If the £120 is a fixed amount - open a 2nd account for the other £20..

Whichever account(s) you open, don't forget to complete an R85 form for interest to be paid gross - your son will need to fill these in again when he reaches 16.

Regards
Sunil

william1872

Thanks all some great advice there - I'll be arranging this swapped over next week