Child bank account

teleri1996

I’ve just had a baby and am looking to open a bank account for her. What is the best bank account to open with the best interest rate etc? 

eskbanker

https://www.moneysavingexpert.com/savings/junior-isa/ explains junior ISAs, which are likely to be the best option for long term money accessible only at 18 - using a stocks and shares one will offer the best prospect of the money not losing real-terms value to inflation....

https://www.moneysavingexpert.com/savings/child-savings-tax-free/ are an alternative if there's a desire for money to be more accessible ahead of 18.

lr1277

With a junior ISA, your daughter will have access to the money on her 18th birthday. All of it.
One way to ensure she spends it wisely is to start her financial education from a young age.
Or you could save the money in your name and hand it over when you think she is ready.

Marchitiello

For a New born you do not have much choice nowadays aside of Junior ISA (that have replaced Child Trust Funds and Child Bond Allowances) where you can save up to £9000 per year currently. From when they turn 7, they can open a child saving account in their name and with a parent as a trustor (I opened RBS’ first saver account for both my kids when each turned 7). At 12 you can open for them (still need parents consent) Child Current Accounts (my eldest opened one with each RBS, Barclays and HSBC, with app based online banking and Debit Card). At 13 they can apply independently for some account (again my eldest has also applied directly for a Santander’s one as soon as he turned 13). I encouraged him to get all these accounts so that he will have some history with each of those Bank when he turns 18 and may need other financial products from them.  

wmb194

Marchitiello said:

For a New born you do not have much choice nowadays aside of Junior ISA (that have replaced Child Trust Funds and Child Bond Allowances) where you can save up to £9000 per year currently. From when they turn 7, they can open a child saving account in their name and with a parent as a trustor...

No, it's no problem to open an ordinary non-Isa bare trust account on the behalf of any child. It's been a while since I did it but it doesn't appear that anything has changed e.g., from the T&Cs of Barclays' Children's Savings account, "To hold this account you must be at least 18 years old and resident in the UK. You can only hold a Barclays Children’s Savings account in your sole name. You will operate the account as trustee for one child under 18 years old (the “Child”)."

https://www.barclays.co.uk/savings/instant-access/barclays-childrens-savings/

Marchitiello

wmb194 said:

Marchitiello said:

For a New born you do not have much choice nowadays aside of Junior ISA (that have replaced Child Trust Funds and Child Bond Allowances) where you can save up to £9000 per year currently. From when they turn 7, they can open a child saving account in their name and with a parent as a trustor...

No, it's no problem to open an ordinary non-Isa bare trust account on the behalf of any child. It's been a while since I did it but it doesn't appear that anything has changed e.g., from the T&Cs of Barclays' Children's Savings account, "To hold this account you must be at least 18 years old and resident in the UK. You can only hold a Barclays Children’s Savings account in your sole name. You will operate the account as trustee for one child under 18 years old (the “Child”)."

https://www.barclays.co.uk/savings/instant-access/barclays-childrens-savings/

I actually have those as well, but they sit completely on my name and in my online banking. The interests is also crap, so JISA would be the way to go. saving account in their name and later Child Current Account will help them learning about managing their own money 

wmb194

Marchitiello said:

wmb194 said:

Marchitiello said:

For a New born you do not have much choice nowadays aside of Junior ISA (that have replaced Child Trust Funds and Child Bond Allowances) where you can save up to £9000 per year currently. From when they turn 7, they can open a child saving account in their name and with a parent as a trustor...

No, it's no problem to open an ordinary non-Isa bare trust account on the behalf of any child. It's been a while since I did it but it doesn't appear that anything has changed e.g., from the T&Cs of Barclays' Children's Savings account, "To hold this account you must be at least 18 years old and resident in the UK. You can only hold a Barclays Children’s Savings account in your sole name. You will operate the account as trustee for one child under 18 years old (the “Child”)."

https://www.barclays.co.uk/savings/instant-access/barclays-childrens-savings/

I actually have those as well, but they sit completely on my name and in my online banking. The interests is also crap, so JISA would be the way to go. saving account in their name and later Child Current Account will help them learning about managing their own money 

You can have a children's account displayed in your internet banking but it still beneficially belongs to the child. I have it with their Halifax accounts, too, and it's great as it makes it very easy to manage. Anyway, we are talking about a newborn here and the OP asked about a bank account.

xylophone

May well never be a problem but parents should be aware of the "£100 rule" -(t does not apply to parental gifts into JISA).

 If gifts from a parent  into a non-tax privileged account produce more than £100 gross income a year, the whole of the income from the gifts is normally taxed as that parent's income. A child cannot get back any tax on that income. 

The £100 rule applies separately to each parent.

The £100 rule applies to income arising each year. It does not matter whether the money in the account is comprised of part capital and part added interest. The £100 rule applies as long as income is over £100 in any one year for any one child from one parent.

For example

If a parent gives a child £2,000 which earns £98 interest the interest belongs to the child for tax purposes.  But if the £98 is added to the account, leading to £101 interest being earned in year 2, the interest has now exceeded the £100 limit. This means it now belongs to the parent (for tax purposes  only).

Marchitiello

wmb194 said:

Marchitiello said:

wmb194 said:

Marchitiello said:

For a New born you do not have much choice nowadays aside of Junior ISA (that have replaced Child Trust Funds and Child Bond Allowances) where you can save up to £9000 per year currently. From when they turn 7, they can open a child saving account in their name and with a parent as a trustor...

No, it's no problem to open an ordinary non-Isa bare trust account on the behalf of any child. It's been a while since I did it but it doesn't appear that anything has changed e.g., from the T&Cs of Barclays' Children's Savings account, "To hold this account you must be at least 18 years old and resident in the UK. You can only hold a Barclays Children’s Savings account in your sole name. You will operate the account as trustee for one child under 18 years old (the “Child”)."

https://www.barclays.co.uk/savings/instant-access/barclays-childrens-savings/

I actually have those as well, but they sit completely on my name and in my online banking. The interests is also crap, so JISA would be the way to go. saving account in their name and later Child Current Account will help them learning about managing their own money 

You can have a children's account displayed in your internet banking but it still beneficially belongs to the child. I have it with their Halifax accounts, too, and it's great as it makes it very easy to manage. Anyway, we are talking about a newborn here and the OP asked about a bank account.

I may not be explaining myself, but that type of account is virtually the same that just have a saving pot in the parent own name. I have three of those accounts with Barclays, main name on the account is me and only the annual statements, addressed to me, have a mention of the beneficial child on them. I originally opened  them  as regular savers and with a promotional rate associated to it. I did get for few years request to confirm tax residency for all three of my kids but the main issue for me is that I can simply take out money myself transferring to any of my others Barclays account.  What is more, my eldest has since opened a child current account and have full Barclays online direct access but have no visibility of that account. In contrast, a child saver account from age of 7, you would need to visit a branch and have the child with you, as the account is in their full name. As a matter of fact, when my eldest also opened a child current account with RBS was immediately able to see his saving account held since he was 7 and transfer moneys between his current and saving account.  A JISA will be accessible by the child when they turn 18. 

wmb194

Marchitiello said:

wmb194 said:

Marchitiello said:

wmb194 said:

Marchitiello said:

For a New born you do not have much choice nowadays aside of Junior ISA (that have replaced Child Trust Funds and Child Bond Allowances) where you can save up to £9000 per year currently. From when they turn 7, they can open a child saving account in their name and with a parent as a trustor...

No, it's no problem to open an ordinary non-Isa bare trust account on the behalf of any child. It's been a while since I did it but it doesn't appear that anything has changed e.g., from the T&Cs of Barclays' Children's Savings account, "To hold this account you must be at least 18 years old and resident in the UK. You can only hold a Barclays Children’s Savings account in your sole name. You will operate the account as trustee for one child under 18 years old (the “Child”)."

https://www.barclays.co.uk/savings/instant-access/barclays-childrens-savings/

I actually have those as well, but they sit completely on my name and in my online banking. The interests is also crap, so JISA would be the way to go. saving account in their name and later Child Current Account will help them learning about managing their own money 

You can have a children's account displayed in your internet banking but it still beneficially belongs to the child. I have it with their Halifax accounts, too, and it's great as it makes it very easy to manage. Anyway, we are talking about a newborn here and the OP asked about a bank account.

I may not be explaining myself, but that type of account is virtually the same that just have a saving pot in the parent own name. I have three of those accounts with Barclays, main name on the account is me and only the annual statements, addressed to me, have a mention of the beneficial child on them. I originally opened  them  as regular savers and with a promotional rate associated to it. I did get for few years request to confirm tax residency for all three of my kids but the main issue for me is that I can simply take out money myself transferring to any of my others Barclays account.  What is more, my eldest has since opened a child current account and have full Barclays online direct access but have no visibility of that account. In contrast, a child saver account from age of 7, you would need to visit a branch and have the child with you, as the account is in their full name. As a matter of fact, when my eldest also opened a child current account with RBS was immediately able to see his saving account held since he was 7 and transfer moneys between his current and saving account.  A JISA will be accessible by the child when they turn 18. 

If you want more surety then using e.g., Lloyds/BoS/Halifax is better as the terms of those explicitly say that the bank will contact the child when they reach 16 but the Barclays accounts definitely do beneficially belong to the child: see screenshot of the relevant terms below. Being able to withdraw the money as a trustee is just part of the job and can be quite useful! Obviously there are other children's accounts available but these aren't particularly relevant to the discussion of an account for a newborn.

*EDIT: I've just checked the statement for their Barclays Children's Account and their name is stated on there, at the top right of the page: "Mr [WMB194] Re Master [child's name]"