Best Savings accounts for my 3 children

showmethemoney11

Hi All
I am looking for some advice on the best savings options for my 3 children who are 7, 5 and 3.
They all currently have accounts with Nationwide but the interest is next to nothing.
They have accrued nearly £7k, £6k and £3.5k respectfully which has come from a mix of birthday gifts, inheritance and lump sums from my wife and I.
The hope is that by the time their 18 they have a substantial sum which has been earning interest all this time. They don't need frequent access which is why I have been looking at a children's ISA but then I read that there's not much benefit over a regular savings account.

But am I right in thinking that with a savings account they would have to pay tax if they earn over £100 interest pa? In which case an ISA sounds like a better idea.

Any thoughts or comments welcome.

Thank you!

sheslookinhot

Why do you think they would need to pay tax if they earn interest over £100 ? This would only apply if you gave them the money ?

I assume this is HMRC closing a tax avoidance loophole. All other gifts they have their own PTA.

showmethemoney11

We put a small amount into their accounts every month and every so often larger lump sums into the account (my job is commission based) hence my comment about paying tax on any interest >£100, as the majority of their money is coming from us as parents.

Theoretically how does it work if 50% is gifted from grand-parents/friends and 50% from parents?

jimjames

showmethemoney11 said:

Theoretically how does it work if 50% is gifted from grand-parents/friends and 50% from parents?

You'd need to keep track of what was from you. That's the advantage of an ISA in that you don't need to keep those sorts of records. You might also want to consider investing over the timescales you've mentioned as it should give a better return than savings accounts. That can be done with a JISA too

Eirambler

I know it's not what you've asked, but if you're happy that this money isn't needed until they're 18 they'll almost certainly end up better off if you put the money in a junior investment ISA.