What banks / building societies offer will trust SAVINGS accounts?

Yellowman

Having made further enquiries, it does indeed appear that will trust accounts are only offering interest of around 0.01% (e.g. Barclays and NS&I).

I want something similar to 0.5% - 0.6% currently being offered on some ordinary savings accounts.

I understand that a trust fund protects the money from creditors and probate, but inflation will reduce its value over the years - a better interest rate would compensate to some extent.

A trust account does not seem economical, but many people must need them!

wmb194

Yellowman said:

Having made further enquiries, it does indeed appear that will trust accounts are only offering interest of around 0.01% (e.g. Barclays and NS&I).

I want something similar to 0.5% - 0.6% currently being offered on some ordinary savings accounts.

I understand that a trust fund protects the money from creditors and probate, but inflation will reduce its value over the years - a better interest rate would compensate to some extent.

A trust account does not seem economical, but many people must need them!

For most people a bare trust will suffice and e.g., Barclays' children's instant access account offers 1.5% and Lloyds' 1%. As I mentioned before, you don't have to be the parent or guardian to open these. For more complicated trusts they will no doubt be rubbish but usually they'll be a conduit for making investments of some type. 

It seems insane to me that you have £20,000 that you can only invest risk free for the next 16 years. "Risk free" would normally be assumed to include e.g., gilts and US treasuries. Perhaps you have some wiggle room to consider things other than cash?

eskbanker

Yellowman said:

The trust account must be risk-[f]ree.

How exactly is this defined?  'Risk' is often used as shorthand for the specific risk of capital loss, but many other risks apply, so, as you recognise, inflation risk is a very real one when looking at a 16 year period - inflation has just risen sharply but as things stand right now you'd be losing at least 3% a year, i.e. about 40% loss of real-terms value over the duration if that continued, so if investment was an option it would definitely be worth considering....

Yellowman

I shall consider the wider definition of risk, but finding investments that allow trustees to hold the account appears difficult.

'Barclays Children's Savings Terms and Conditions' state that a trustee can only hold a Barclays Children's Savings Account in a sole name - there are two trustees in my case (as there are two executors on the will). This is probably why Barclays is only offering the current account at 0.01%.

I haven't considered Lloyds.

Frogletina

I've just opened a trust account for my 15 year old granddaughter with Skipton building society.

It pays 1.3% interest

Yellowman

I think this is different from a will trust.

Yellowman

I have considered the various risks of shares, unit trusts, bonds, etc.

I am considering a long-term fixed interest bond as a good option.

I enquired at Shawcross Bank as I have a friend with such an account but they no longer offer bonds to will trustees (stopped about two years ago).

Are there any bonds available for will trust funds?

Google searches are inconclusive!

xylophone

I am considering a long-term fixed interest bond as a good option.

Given the risk of inflation, this may not be a good idea.

What exactly does the will say concerning this bequest?

Yellowman

The will (probate completed) states that a sum of £20,000 is to be provided to a child (currently aged 2) at the age of 18 - so this becomes a bare trust.

One financial advisor suggested that placing this sum in a bond may be too risky (as one product) and that an investment trust would be less so (as this would include a range of products).

I suppose a range of bonds may be an option, but finding bonds for will trusts is proving difficult.

Daliah

If all that is required that the child gets £20,000 (at least) when they are 18, then surely a cash JISA fits the bill? Get a parent / legal guardian to open the JISA in the child's name, put £20k into it now, and the child can get the money when they are 18. In the interim, the money is the child's, and nobody can withdraw it.