Saving on Someone Else's Behalf

zakalwe_2

Hi,

My best friend and his wife have just had their first child and I'd like to open a savings account on her behalf and then stick some money in it every birthday with the idea being that she gets access to it when, for example, she goes to university or needs a house deposit. I'm thinking a Mini Cash ISA is probably the way to go but I'd like to check a couple of things.

Firstly, would a Cash ISA be the most efficient option considering no money will be taken out for at least 16 years and only a few hundred pounds (assuming other people pay in too because I'm not that rich!) will be paid in each year?
Secondly, is opening an account in someone else's name straightforward or even possible?

Thanks in advance,
Simon

Aegis

You can't open a mini cash ISA in a child's name. You need to be 16 or older to start one, and it needs to be in your own name.

You could try a Child Trust Fund? Or another child account type that I'm unaware of

chesky369

Halifax do a regular savings account for children but I think the parent has to open it - at any rate, you have to have the child's birth certificate.

Primrose

If you open a cash ISA, it would have to be in your own name, and you need to be absolutely sure that you're prepared to forego your ISA allowance for yourself for the next 18 years or so. Is that viable for you as your own financial strategy may change over that length of time. Also, do you want to retain control of the money, even if other people are paying into the account? It may be a better option for you to open a separate savings account and pay the money in as and when you can afford to. But as the child presumably would have no income you might need to register for her not to have tax deducted and this possibly might be a problem if the parents or other family members are paying into another account. Also looking into the long term, the goverment have plans to take over accounts which seem effectively dormant (without use) after a certain number of years, so you would have to be sure that you did keep the account active and add a little money every year.

Mikeyorks

As post #3 - the Halifax 10% account looks as though it may fit the bill? As a 'friend' you can open it directly - but may have to come up with ID for the child :-

http://www.halifax.co.uk/savings/childregularsaver.asp

..... contrary to the poor write up - it does continue into subsequent years at 10%. But it's swept clear into a sav4it account each year (6.05% currently) - so you don't get the compounding at 10%.

The ISA, as other posts, is a non-starter unless you open it in your name