Children's savings

rootzmanuva

Hi all,

I'm probably being really dull but reading the articles on children's savings I'm still unsure what the best thing is to do to get the best returns on my child's savings. She is 8 years old and currently has about £11k in an ISA at about 4%. She will soon be receiving potentially £10k or more, due to a death in the family.

I think you can only have one ISA and can only put £9k a year in them (unless I've misunderstood this).

I want the money to be locked away until she is 18, as it is with the ISA, and I know nothing about stocks and shares, so not keen to risk losing money, especially as it isn't mine to lose.

Other option I was thinking is to just put it all or 1/2 of it in premium bonds. 

Any thoughts / advice greatly appreciated.

Thanks

refluxer

A child can't have two Junior Cash ISAs, but they can have one Junior Cash ISA and one Junior Stocks and Shares ISA, with the £9k annual allowance being shared between them. If you don't want to open a Stocks and Shares JISA, then you'll have to stick with the Cash JISA you already have, but you're free to transfer between providers to get the best rate.

The good thing about a Junior ISA is that the interest is exempt from tax, whereas if you give your child money that goes into a normal savings account (or accounts) and it earns more than £100 PA in interest, then the whole lot would be potentially subject to tax at your rate (so will count towards your own PSA).

If you're looking for the money to grow then Premium Bonds would not be a good option, IMO. The prize rate is dropping to 3.6% soon (with the average return being a fair amount less than that) and you also need a very substantial sum to get near that prize rate with average luck, so that money would almost-certainly be better off in the JISA you already have at 4% than it would be in Premium Bonds. You also lose control of a child's Premium Bonds once they reach the age of 16. 

Keep_pedalling

With 10 years of potential growth a S&S JISA would be a good choice for at least some of it. You don’t need any stock market knowledge, just place it in a well diversified multi asset fund. 

xylophone

You can pay as much as possible of the £10k into the JISA in the current tax year and the balance in the succeeding tax year.

The balance could be held in eg

https://www.skipton.co.uk/savings/childrens-savings-accounts/childrens-trust-saver

until 6/4/26