£1000 in childrens' names to look after

mindovermatter

My father very kindly placed £1000 in an instant access account with the Post Office on the birth of my 2 daughters.
I understand that the current gross AER is 3.85%.
Has anyone any suggestions about where to place this money to get a decent rate?
It must stay in separate accounts.
Best wishes
Mindovermatter

Primrose

One problem you will face in trying to move this money to higher paying interest accounts is the Money Laundering regulations you will have to deal with to open new accounts in the name of minors who do not have any official documentation of their own. We are currently facing a similar problem as trustees for young children who are beneficiaries under a relative's Will because a lot of high interest paying accounts have restrictions on accounts being operated by trustees. Will come back and post again if we find any suitable accounts.

mindovermatter

many thanks for that - this problem never occurred to me.
we have opened a couple of Halifax 'regular savers' and 'save for it' accounts with no problems but the amount are only £10 a month with a £40 initial deposit!
I might be tempted by premuim bonds but dad's money will mix with other money and thats not what he wants.
Mindovermatter

pantsmachine

I have used 1 year fixed rate bonds for my kids for years. I set them up with a decent account for the year(halifax 10% account at the moment £100 per month max each). Once the year is up i close out the account and add that sum of cash to the current bond that is maturing and look around for the best fixed rate bond i can get for them. They are on an anglo irish ones at the moment. My wife opens the bonds in the kids name sends the birth certificate copies, says they are minors and it rolls along itself till the cheque comes back the next year. This seemed like the safest way to grow their money from when they were wee and its worked. Occasional hassle when the company charges tax on the bond at the end but we fill in the R15 from(i think that's the right No) and claim it back.

mindovermatter

I was thinking along the same lines re one year bonds - funnily enough i actually phoned anglo irish thoday but they will not take any one under 18 years of age.
will try nottingham bs on monday

Mikeyorks

mindovermatter wrote: »

I might be tempted by premuim bonds but dad's money will mix with other money and thats not what he wants.

'His' money is in the PO accounts! What you have are separately denominated credits, in lieu, of £1k each in the name of your children. As long as the £1k remains identifiable ... is it an issue?

Process it through the Halifax accounts (£100pm) instead of the £10 monthly (add that as a lump afterwards?). Then separate it out of the Sav4it accounts and into a Halifax bond or whatever.

Do you use ISAs? If not - put the £1k into one each under the name of yourself / OH. Then cut it across to the children after 16. Etc ...

Trust, meantime, R85s were filed against the PO accounts - to generate gross interest?

pantsmachine

Ok the other way to do it would be if you have a member of your family who is a non tax payer and over 18, you could put the bonds in their name, maybe getting complicated for the sake of taxable interest on £1,000 each......