Saving for Grandchildren

newbieni

Hi All,

My mum wants to setup and manage a savings account for my two kids. She has suggested making an initial deposit of £100 into each account and then adding £5 per month, hoping to increase this at birthdays/Christmas.

Is this possible and what are the best options?

Thanks in advance.

refluxer

While it may be possible for a grandparent to open a savings account for a grandchild, it's normally easier for a parent to open a children's savings account in my experience - you'll need proof of ID, both for yourself (if it's not your usual bank) and for the child (birth certificate as a minimum) and most children's accounts need to be opened in a branch, so looking at local options is a good place to start. It's often the smaller, local building societies that have children's savings account with decent rates and these don't always feature on comparison sites due to geographical restrictions.

For modest monthly contributions, a child's regular saver would be ideal - the Halifax and Saffron and Coventry building societies all have childrens' regular savers paying >5% or, failing that, HSBC pay 5% on balances up to £3000 with their MySavings account.

https://savingschampion.co.uk/best-buys/personal/childrens-savings-accounts

Mark_d

How do you mean you mum wants to 'manage' the accounts?  Is she just wanting to set-aside money for the kids, so that they can access them when they turn 18 (eg. to help with university costs) ?  If so then you could set-up/manage junior ISAs which your mum would be able to make payments into.

If the idea in to give your kids an 'income' (aka. pocket money) then maybe they need an account like Starling Kite.

newbieni

Mark_d said:

How do you mean you mum wants to 'manage' the accounts?  Is she just wanting to set-aside money for the kids, so that they can access them when they turn 18 (eg. to help with university costs) ?  If so then you could set-up/manage junior ISAs which your mum would be able to make payments into.

If the idea in to give your kids an 'income' (aka. pocket money) then maybe they need an account like Starling Kite.

I have a Fidelity S&S ISA setup for both, they only has about £200 in each. What would be the best way to develop this with mum's funds?

Suzycoll

newbieni said:

Hi All,

My mum wants to setup and manage a savings account for my two kids. She has suggested making an initial deposit of £100 into each account and then adding £5 per month, hoping to increase this at birthdays/Christmas.

Is this possible and what are the best options?

Thanks in advance.

yes this is possible.

I opened an account with Principality BS for both my grandchildren. I have a standing order to put money in every quarter. I could also open my own account with the same rate of interest (currently 4.7%).

I had to take their birth certificates to the local branch and the account had to be in their names.

refluxer

newbieni said:

Mark_d said:

How do you mean you mum wants to 'manage' the accounts?  Is she just wanting to set-aside money for the kids, so that they can access them when they turn 18 (eg. to help with university costs) ?  If so then you could set-up/manage junior ISAs which your mum would be able to make payments into.

If the idea in to give your kids an 'income' (aka. pocket money) then maybe they need an account like Starling Kite.

I have a Fidelity S&S ISA setup for both, they only has about £200 in each. What would be the best way to develop this with mum's funds?

The first thing you would need to do is check that your mum is happy with the fact that her money would be invested in the stock market (rather than in a savings account where you know the interest rate and therefore the returns are guaranteed) and that the children wouldn't be able to access the money until they're 18.

It's worth noting that a child can have both a cash JISA and a stocks and shares JISA.

LHW99

refluxer said:

newbieni said:

Mark_d said:

How do you mean you mum wants to 'manage' the accounts?  Is she just wanting to set-aside money for the kids, so that they can access them when they turn 18 (eg. to help with university costs) ?  If so then you could set-up/manage junior ISAs which your mum would be able to make payments into.

If the idea in to give your kids an 'income' (aka. pocket money) then maybe they need an account like Starling Kite.

I have a Fidelity S&S ISA setup for both, they only has about £200 in each. What would be the best way to develop this with mum's funds?

.............and that the children wouldn't be able to access the money until they're 18.

And happy that they will be able to access it at 18 - otherwise it may be best for her to open accounts in her own name, so that she can decide when she feels it would be most useful for them (uni, car, house deposit etc.)

Green_hopeful

I pay money into premium bonds for my grandchildren. There is a minimum amount you have to invest but I think it’s £25. I only invest on their birthdays. I ticked the reinvest prizes option to build up their bonds. I realise your mum wants to invest a bit less than the minimum but she could do it on their birthday and Christmas or something an meet the minimum. My grandchildren win a reasonable amount. Other people can invest for them as well. 

NoodleDoodleMan

I've just stumbled upon this thread - we have Virgin Money Headstart savings accounts for the grandkids - current interest rate is 6.00% Gross, 6.14% AER.

Can be opened by grandparents without parental/guardian authority, which is what attracted us.

Has some less attractive features though, so make sure you understand the pros and cons of the T's&C's.

https://uk.virginmoney.com/virgin/downloads/vm31914.pdf

refluxer

NoodleDoodleMan said:

I've just stumbled upon this thread - we have Virgin Money Headstart savings accounts for the grandkids - current interest rate is 6.00% Gross, 6.14% AER.

Can be opened by grandparents without parental/guardian authority, which is what attracted us.

Has some less attractive features though, so make sure you understand the pros and cons of the T's&C's.

https://uk.virginmoney.com/virgin/downloads/vm31914.pdf

An account that tracks at 1% above the base rate is very impressive. The terms say that's subject to change, so is that rate bonus still current ?

The account isn't available at the moment though, possibly because it's branch-only and Virgin money have closed a large proportion of it's branches ?

As you've already got one, it's definitely worth keeping if you're near a branch and don't mind the 30 day notice requirement for withdrawals, as it's considerably better than any other childrens' savings accounts currently available.

If you don't have a reasonably local branch though, then it's worth thinking about what you'll do when the kids reach the age of 17 : https://forums.moneysavingexpert.com/discussion/6462517/inaccessible-virgin-bank-account/p1

Nardy

NoodleDoodleMan said:

I've just stumbled upon this thread - we have Virgin Money Headstart savings accounts for the grandkids - current interest rate is 6.00% Gross, 6.14% AER.

Can be opened by grandparents without parental/guardian authority, which is what attracted us.

Has some less attractive features though, so make sure you understand the pros and cons of the T's&C's.

https://uk.virginmoney.com/virgin/downloads/vm31914.pdf

I wonder if this will an effect?

https://www.nationwide.co.uk/news-and-stories/virgin-money-acquisition/