Best savings account for 16 year old 25 October 2020 at 9:52AM in Savings & Investments 4 replies 698 views

HandyMandy

My 16 year old DD currently has approx £12,500 in her child saving account with the Nationwide however interest rate is now only 0.6%. We also pay £100.00 into it every month. I’m looking for an account that pays better interest than she currently has but most children’s accounts need to be opened before age 16, the ones that don’t only pay interest up to £2.5 / £3k and I really don’t want the money split over several small accounts. (She already has a Mini Santander account & Child Trust Fund so isn’t eligible for a child ISA). There are adult accounts where I can get 1.01% interest but you need to be 18 to open them. 

Anyone suggest any other accounts, she won’t need access to the money for at least 2 years and maybe even 5 years so open to long term saving accounts. 

Thanks. 

colsten

https://moneyfacts.co.uk/savings-accounts/childrens-savings-accounts/?id=null&investment-amount=12500&investment-type=1&account-types=32&interest-paid-frequencies=null&terms=null&account-opening-methods=null&account-management-methods=null&notice-periods=null&include-notice-period=true&include-term=true&age=17&default-age=17

colsten

Regarding the CTF, have you investigated changing it to a JISA? https://www.moneysavingexpert.com/savings/child-trust-fund-vouchers/

xylophone

(She already has ,,,,,,, Child Trust Fund so isn’t eligible for a child ISA). 

You have made the current CTF year contribution?
If you transfer the CTF to JISA  example https://www.coventrybuildingsociety.co.uk/consumer/product/savings/children/junior-cash-isa.html
this closes the CTF and enables you to make the full JISA contribution (£9000) for the current tax year.

See https://www.gov.uk/guidance/transfer-of-a-child-trust-fund-or-junior-isa-if-youre-an-isa-manager
The annual subscription limit for a CTF is based on the child’s birth year while JISA subscriptions are based on tax years. Where a CTF is transferred to a JISA, the CTF provider does not need to pass any subscription details to the JISA manager. Once the transfer has been made, the child can access the full JISA subscription limit for the tax year of transfer regardless of any subscriptions made to the CTF in that year.

justme111

Op , this is exactly the reason I have sent off the form for transferring CTF into isa a few days ago  - being able to access better cash ISA rate for my daughter. She has CTF with investments and cash in Halifax which earns nothing now so wanted to move it into ISA.