Children’s saving accounts

jonnym92_2

Hi,

my wife and I are looking to set up a savings account for our 7 week old daughter.
we have seen a few banks that offer introductory rates at a good AER then  after 12 months they put you onto a usual kids saver account and the rate drops to a % depending on the company.

our main question is could you reap the benefits from e.g the Halifax Savings at 4% for 12 month at £100 max per month then after the 12 month withdraw it/ close the account down and join another bank e.g HSBC that pays 2.5% up to £3k and has no deposit limits.

also can each parent do this or is it one account per child?

Thanks 

cloud_dog

With regard to regular savers it will be one per child.

Based on the child's age, and assuming this money is for the child's future (as opposed to in a few years time), I would suggest you really should consider using a stocks and shares investments option, and think about building a cash savings later in their (child) life.

xylophone

Had you considered a JISA?
https://moneytothemasses.com/quick-savings/parents/best-junior-stocks-and-shares-isa

https://www.gov.uk/junior-individual-savings-accounts
Other child accounts
https://www.thisismoney.co.uk/money/saving/article-1583863/Best-savings-rates-Junior-Isas-children-s-accounts.html

jonnym92_2

Hi, thanks for the replies.

yeah our intention is to give her it for her 18th birthday and we had never thought of a stocks and shares isa, but it makes sense over the timeframe we have.

are they easy to set up and manage and can you select what it is invested into, I’m not so bothered about companies as such, more risk involved. My pension plan works this way and we can select high, med or low risk but obviously the returns are less. 

With this if possible I’d set of in a higher risk and reduce risk and time remaining reduces if that makes sense 
thanks for your help

xylophone

With regard to a stocks and shares JISA, Fidelity has received favourable mentions recently.
https://www.fidelity.co.uk/junior-isa/

Alexland

Fidelity are very good and basically giving away their S&S JISA wrapper with no upfront or ongoing charges for investing in funds. But you would still need to select a fund from the thousands available. You might want to use a Target Date fund that reduces risk as the withdrawal date approaches to get more certainty of outcome. The VTR2035 fund (ignore the word retirement) might be of interest it's currently 70% equities and 30% bonds and costs 0.24% pa. After maybe a decade you might want to switch back to a cash JISA if the rates are still looking attractive for the final run. Still if you expect your daughter to invest beyond age 18 eg for a property purchase at age 25 then maybe you could switch her to carry market risk for longer.

https://www.vanguardinvestor.co.uk/investing-explained/what-are-target-retirement-funds