Daughters Savings in parents account -

shahpur

A bit of advice please , my neighbour currently has a Santander 123 mini which he opened for his daughter a couple of years ago and missed that they were only paying interest on the first 2k and continued to pay in and is currently at 4k . 

As it seems that you can get a higher rate as an adult looking to transfer the funds into his / wifes account -  is against the rules of a isa / bank account . The funds will go to the daughter but hopefully over the years get quite a bit more compounded interest than what is offered with a childs account

 Her dad has not added new money to his allowance this year but just transferred funds from an older isa into a new one so should be any issues.

It only came up as I mentioned I was getting over 6% on a regular saver and was upset that his daughter was getting less than half.

xylophone

my neighbour currently has a Santander 123 mini which her dad only found out was paying interest on the first 2k  

Then either your neighbour or her father must have ignored the terms and conditions when the account was opened.

https://www.santander.co.uk/personal/current-accounts/123-mini-current-account

How old is your neighbour?

shahpur

xylophone said:

my neighbour currently has a Santander 123 mini which her dad only found out was paying interest on the first 2k  

Then either your neighbour or her father must have ignored the terms and conditi when the account was opened.

https://www.santander.co.uk/personal/current-accounts/123-mini-current-account

How old is your neighbour?

hi revised the original post as i was typing it on my way to work . He is early 40s and daughters 6 .

eskbanker

Sounds like it would be best for him to study what's available in the market for his daughter:

https://www.moneysavingexpert.com/savings/child-savings-tax-free/

A junior ISA may be an option, if he's happy for her to have access to the money at 18, but if he wishes to retain control beyond that then he'd need to save in his own name via adult products.  The money that's already in her name would need to stay in her name though....

xylophone

Your neighbour should note the £100 rule if he is gifting money to a non JISA interest bearing account in the name of  his unmarried minor child. 

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem4310

The rule does not apply to parental gifts into JISA.

jimjames

shahpur said:

As it seems that you can get a higher rate as an adult looking to transfer the funds into his / wifes account -  is against the rules of a isa / bank account . The funds will go to the daughter but hopefully over the years get quite a bit more compounded interest than what is offered with a childs account

That seems to be the opposite of what is normally posted here - that child accounts pay a lot more than adult ones and people want to use the child's account for their own savings. Have you checked rates?

xylophone

Have you checked rates?

They can be checked at link given by previous poster.

wmb194

jimjames said:

shahpur said:

As it seems that you can get a higher rate as an adult looking to transfer the funds into his / wifes account -  is against the rules of a isa / bank account . The funds will go to the daughter but hopefully over the years get quite a bit more compounded interest than what is offered with a childs account

That seems to be the opposite of what is normally posted here - that child accounts pay a lot more than adult ones and people want to use the child's account for their own savings. Have you checked rates?

In general at the moment this is correct. The situation has reversed e.g., at the moment Barclays Children's savings a/c pays 2.5% whilst Barclays currently offers adults' savings a/cs paying 3% (less interest in month of a withdrawal) and 5% (£5k max).