Adult Cash ISA that can be opened when under 18?

MJaye

My 17 year old daughter wants to open a cash ISA, but the best rated accounts on here (Cynergy, Marcus, Tesco etc) have a minimum age of 18. Does anyone know of any easy access cash ISA's that are available to her. Thanks

refluxer

Is there a reason it specifically has to be an ISA ? They're normally opened in order to avoid paying tax on any interest but she can earn up to £18,570 a year before she'd start paying that.

If it doesn't have to be an ISA and she wants easy access, she could currently get 3% with the HSBC 'MySavings' account on balances up to £3,000 (which is far more than you'll get on any Easy Access ISA) but it obviously depends on the amount she's wanting to save. Have a look at the accounts listed here to see if any would be suitable.

If she's set on an ISA then a Junior Cash ISA would be a good option (interest rate-wise) if she doesn't already have one, although she wouldn't be able to access the money until she's 18. Tesco pay the highest rate for a Junior ISA you can manage online or you can get more elsewhere if you're prepared to deal with it by phone, branch or post.

MJaye

refluxer said:

Is there a reason it specifically has to be an ISA ? They're normally opened in order to avoid paying tax on any interest but she can earn up to £18,570 a year before she'd start paying that.

If it doesn't have to be an ISA and she wants easy access, she could currently get 3% with the HSBC 'MySavings' account on balances up to £3,000 (which is far more than you'll get on any Easy Access ISA) but it obviously depends on the amount she's wanting to save. Have a look at the accounts listed here to see if any would be suitable.

If she's set on an ISA then a Junior Cash ISA would be a good option (interest rate-wise) if she doesn't already have one, although she wouldn't be able to access the money until she's 18. Tesco pay the highest rate for a Junior ISA you can manage online or you can get more elsewhere if you're prepared to deal with it by phone, branch or post.

Thanks for the Easy Access savings accounts link. Doesn't have to be an ISA if she's not going to get caught for tax.

Her grandparents have been saving for her since she was born and they've given her the money (£5K) now rather than wait until she's 18. She wants/needs to open an account to put the money into rather than keep it in her current account for it to get spent without realising. 

She also has a CTF which matures soon so she'll have about £10.5K in savings to put aside somewhere. She's starting university in Sept/Oct so definitely won't be earning that sort of money for a while.

No point opening the Junior ISA as she turns 18 in August. Just didn't want to wait until 18 to open an account because it will be sitting in the current account for a couple of months.

MJaye

refluxer said:

Is there a reason it specifically has to be an ISA ? They're normally opened in order to avoid paying tax on any interest but she can earn up to £18,570 a year before she'd start paying that.

If it doesn't have to be an ISA and she wants easy access, she could currently get 3% with the HSBC 'MySavings' account on balances up to £3,000 (which is far more than you'll get on any Easy Access ISA) but it obviously depends on the amount she's wanting to save. Have a look at the accounts listed here to see if any would be suitable.

If she's set on an ISA then a Junior Cash ISA would be a good option (interest rate-wise) if she doesn't already have one, although she wouldn't be able to access the money until she's 18. Tesco pay the highest rate for a Junior ISA you can manage online or you can get more elsewhere if you're prepared to deal with it by phone, branch or post.

Because she has the CTF she can't open a junior ISA, she would need to transfer the CTF. She just wanted to open something quickly now rather than having to transfer it to a Junior ISA and then possibly have to move the money again when the junior ISA matures in couple of months.

I thought you could open an adult cash ISA from 16 and that there was a 2 year window when you could be holding a junior and adult ISA at the same time? so I don't really understand why these accounts require you to be 18 to apply for them.

refluxer

Ah OK - if that's a Cash CTF then she can't open a Junior Cash ISA in addition anyway.

All of those top children's savings accounts turn into adult accounts at age 16 or 18 (with the exception of the TSB Under 19s account) so it'll be up to her if she thinks it's worth opening one of those for 2 months of decent interest. If you had a TSB branch locally, then she'd get 2.5% interest on half of her grandparents' money (£2.5k) until she's 19 which is a lot more than she'll get (easy access) elsewhere as an adult.

If she's not going to be earning anywhere near £18,570 pa with wages and savings interest, then she might as well put her money where it'll earn the most interest and she'll have a lot more options when she turns 18. Currently, the best easy access non-ISA savings accounts (Virgin, Chase etc) are paying more than their Easy Access ISA equivalents.

Daliah

The instant access accounts are often only available for adults, i.e. from 18 onwards.

But she could probably pocket some juicy children's rates for a few months, whilst she still counts as a minor: https://moneyfacts.co.uk/savings-accounts/childrens-savings-accounts/?quick-links-first=false

george4064

The name of the account holder should be at least aged 18 at account opening

masonic

george4064 said:

The name of the account holder should be at least aged 18 at account opening

Not according to HMRC: https://www.gov.uk/guidance/who-can-invest-in-an-isa-if-youre-an-isa-manager
"To be eligible to subscribe to an ISA an investor must be an individual, aged 16 or over (if subscribing to a cash ISA), or 18 or over (if subscribing to a stocks and shares, innovative finance ISA, or a Lifetime ISA)."

That doesn't mean ISA managers must allow 16 and 17 year olds to open one of their cash ISAs, and indeed not all do.

MJaye said:

My 17 year old daughter wants to open a cash ISA, but the best rated accounts on here (Cynergy, Marcus, Tesco etc) have a minimum age of 18. Does anyone know of any easy access cash ISA's that are available to her. Thanks

The best options on Moneyfacts indicating a minimum age of 16 are Ford Money Flexible and Nationwide 1 Year Triple Access, both paying 1%.

refluxer said:

If she's not going to be earning anywhere near £18,570 pa with wages and savings interest, then she might as well put her money where it'll earn the most interest and she'll have a lot more options when she turns 18. Currently, the best easy access non-ISA savings accounts (Virgin, Chase etc) are paying more than their Easy Access ISA equivalents.

There is one good reason why using a cash ISA may be worthwhile, and that is where the young adult has a large amount of savings that they intend to invest in the future. They are not permitted to open a S&S ISA at 16, but can subscribe to a cash ISA for transfer to a S&S at 18. Not many are in this fortunate position - most will not have savings beyond what they may need for emergencies or to take their first step on the housing ladder. However, those who have inherited or otherwise built up large sums that could not be invested in a S&S ISA over one or two tax years could make use of their ISA allowance earlier through temporary use of cash ISAs.