Savings Accounts for 17 year old

coconurtaler

Hi, I'm going round in circles a bit trying to decide the best options.
My son is 17 and has a part time job and is earning up to £300 a month.
He currently has a tsb under 19s account 2.5% with about £1000 but is wanting to put some of his money away so he doesn't spend it straight away.
He also has about £300 in an old smart to save nationwide account with a low interest rate which we need to change/close.
And also he has a matured ns&i children's bond for about £1700.

I had been looking at a junior cash isa for him but have just discovered the H2B ISAs so we are thinking of using the ns&i money for a H2B ISA. But that won't use all the money so I am trying to find the best interest rate for him for the rest.

I'd like to think of the H2B as his long term savings but have another account for instant access/short term savings hopefully with a better interest rate.

17 seems to be a very difficult age to open an account, too young for most of the adult accounts but too old for some of the children's accounts.
And I'm not sure if he could have a H2B ISA and a JISA at the same time.
Any help would be appreciated as I have spent much of the day looking into this trying to find the best option for him. I think it would be easier to decide if it was my money not his but saving is not an option for me at the moment.

bowlhead99

coconurtaler wrote: »

I had been looking at a junior cash isa for him but have just discovered the H2B ISAs so we are thinking of using the ns&i money for a H2B ISA. But that won't use all the money so I am trying to find the best interest rate for him for the rest.

The H2B ISA will take £1000 at opening plus £200 a month. So open it today (£1000) and contribute for December (£200) and January (£200) and February (£200) and March (£200) and that's all of his maturing children's bond used up within the next three months. Presumably going forward if he is only bringing in £300 a month and wants to spend some of that, he is not going to go over the £200 a month limit.

His interest rate on the TSB under-19s account up to £2.5k is pretty good. You mention one of his accounts is with Nationwide that you want to change. Nationwide have their FlexOne current account which can be opened by a 17-yr old; it only pays 1% interest on up to £1k, but it allows access to their FlexOne Regular Saver account. The Regular Saver takes up to £100 a month of contributions and pays 3.5% on them.

While you could run around opening lots of products at lots of places to absolutely maximise interest rates and get the best possible deal, the extra interest earned on £100 at 3.5% rather than 2.5% after an entire year is only £1. So the simplest thing to do is probably open up a HTB while keeping using the TSB account.

TSB don't offer a HTB ISA but Nationwide do and you can open one from age 16 and it pays 2%.

I'd like to think of the H2B as his long term savings but have another account for instant access/short term savings hopefully with a better interest rate.

The account at TSB which he is already using, already pays 2.5%, is instant access and a respectable rate.

The Nationwide FlexOne is a lower rate but the reason to use it is the offer of access to a higher rate regular savings product for small amounts of money. However if he only brings in £300pm and puts £200 in the long-term HTB account and spends some of the rest he does not really need a high interest home for new money because he will not have much spare. It is a trade off having the faff of multiple accounts to seek better rates when the amounts are pretty small and the extra interest available, minimal.

And I'm not sure if he could have a H2B ISA and a JISA at the same time.

Yes, he can.

He can't have a LISA yet, being under 18. That's one to consider in the future as an alternative to H2B ISA. But it has a penalty for withdrawals so not really one to commit to straight away, better to see how his life might turn out first.

As you don't have any of your own money to save for him and lock away long term, you are really just looking at what to do as a short term instant access home for his spare earnings; and in that regard, his existing account at TSB would be fine.