Kids savings account v overpaying mortgage

xylophone

We have a mortgage currently at a fixed rate of 2% and make regular overpayments. Nationwide has a kids saving account which pays interest at 2.5%, no time limit, allows one penalty free withdrawal a year and can hold up to £50k.


The way I see it, it would be better to open an account in my 18 month old daughters name and use it to hold any cash that I would otherwise use to overpay my mortgage. I get a slightly better return and better yet still have access to that cash in case I need it.

I suggest that you put this scenario to Nationwide and ask if they are happy for you to open the account on these terms.

Do let us know if you get the go ahead.......

muhandis

Yessir, will let you know once I've opened the account! You might be overestimating the remit of the bank branch staff though, I doubt they would venture into giving me any advice, it's against FCA rules

xylophone wrote: »

I suggest that you put this scenario to Nationwide and ask if they are happy for you to open the account on these terms.

Do let us know if you get the go ahead.......

xylophone

I doubt they would venture into giving me any advice,

Who mentioned advice?

It's a simple question - you say that you would like to earn a better rate on your savings so propose opening an account in your child's name which in reality will be your account for you to use as you wish.....

For those without a minor child of their own, perhaps they could "borrow" a child from a friend or neighbour....simples..:)

muhandis

Sure, I will tell them that

Unfortunately, the child has to be your own. The NW call centre said I need to bring a passport and birth certificate

I mean, who would have thought that they would have such a basic check in place!

xylophone wrote: »

Who mentioned advice?

It's a simple question - you say that you would like to earn a better rate on your savings so propose opening an account in your child's name which in reality will be your account for you to use as you wish.....

For those without a minor child of their own, perhaps they could "borrow" a child from a friend or neighbour....simples..:)

angie_wonders

I had to prove that I was the parent to open the Santander 123 mini children's account. It shows up under my internet banking login.

xylophone wrote: »

For those without a minor child of their own, perhaps they could "borrow" a child from a friend or neighbour

muhandis

Thanks, that's one more thing to ask them then!

xylophone wrote: »

https://www.nationwide.co.uk/-/media/MainSite/documents/products/savings/terms-and-conditions/P2781-smart-limited-access.pdf

It doesn't specify that in the above.

https://www.nationwide.co.uk/guides/news/articles/2015/10/long-term-saving-for-children

xylophone

Unfortunately, the child has to be your own.

https://www.nationwide.co.uk/-/media/MainSite/documents/products/savings/terms-and-conditions/P2781-smart-limited-access.pdf

It doesn't specify that in the above.

https://www.nationwide.co.uk/guides/news/articles/2015/10/long-term-saving-for-children

kidmugsy

WantToRetireEarly wrote: »

Ugh, what's with the utterly pointless name-calling?

Don't be so wet.

xylophone

Thanks, that's one more thing to ask them then!

It would still be a "parental settlement" (ie the £100 rule would apply) if the parent provided the money to another adult for that person to open the account in the name of a child.

Example 1

https://www.gov.uk/government/publications/trusts-and-settlements-income-treated-as-the-settlors-hs270-self-assessment-helpsheet/hs270-trusts-and-settlements-income-treated-as-the-settlors-2018

muhandis

Cheers. Somehow I doubt anyone would allow me to open an account in their child's name, but definitely good to know!

xylophone wrote: »

It would still be a "parental settlement" (ie the £100 rule would apply) if the parent provided the money to another adult for that person to open the account in the name of a child.

Example 1

https://www.gov.uk/government/publications/trusts-and-settlements-income-treated-as-the-settlors-hs270-self-assessment-helpsheet/hs270-trusts-and-settlements-income-treated-as-the-settlors-2018