Childrens Savings - 2 questions

GreyPilgrim

Having only just got our finances and savings in order we thought we'd turn our attention to an account we have for our daughter and look for the best account for her. It seems that my wife had set up a direct debit to the Halifax's "Regular Savings Account" for £20 per month which turns out the be the best one (according to martin)

Question 1.
I got the impression from martins article that this was a 1 year deal where at the end the total saved + interest would be transferred into a more modest savings account. This HAs been happening with our daughters account at the end of each year but they've been letting us 'restart' that same account each year (the direct debit has never been cancelled), so we've effectively had three years of it (and are starting the fourth year now)
I'm not complaining!! I'm just curious to know if this is an oversight on their part? I thought the whole point of regular savings accounts was to entice you with one years high interest, then move to a 'classic' savings account from then on. Or have I misunderstood? As I said, I'm not complaining...

Question 2.
So after three years of doing this, there's about £700 in her halifax bog standard account (paying 5.5%, I think). Where would you recommend putting this? I specifically do not want instant access (because she is a sly little !!!!!! with a penchant for shoes and handbags). I want something where the money is going to be locked away (for 5-8 years), where I can ideally add to it yearly (when the halifax reg saver flushes out).
Is it too low a balance to be doing this with? Should I just move the cash to somewhere like a Yorkshire One Day account?
Sorry this is long, rambling and confusing....I hope it makes sense.
GP

RoxieW

hi greypilgrim

I have these accounts for my two and now its not an oversight - they'll let you continue with a fresh one unless they discontinued the product. Generally the same for most reg savers i think.

fraid I cant help much on Q2 - i just leave it in the saveforit as it pays a decent amount of interest compared with other accounts - even lock away accounts - and the interest has been continually decent not just a high rate for a few months and then pull the rug!
I'm sure there are lock away bonds etc but sorry I cant advice on them.

GreyPilgrim

RoxieW wrote: »

hi greypilgrim

I have these accounts for my two and now its not an oversight - they'll let you continue with a fresh one unless they discontinued the product. Generally the same for most reg savers i think.

fraid I cant help much on Q2 - i just leave it in the saveforit as it pays a decent amount of interest compared with other accounts - even lock away accounts - and the interest has been continually decent not just a high rate for a few months and then pull the rug!
I'm sure there are lock away bonds etc but sorry I cant advice on them.

Thanks for that Rox, I was worried they might realise their mistake (if it had been a mistake) and try to claw some of the interest back. GP

WendysWorld

how old is your daughter? If she is quite young would you consider something slightly riskier than a savings account? I have two F&C Children's investment plans for my two sons. I started them when they were born (now 4 and 1). The management fees are low (0.5% I think but check this) and you can choose the funds you want to invest in. It was recommended in Martin's investing for children article some time ago which is why I did it!
You can invest anything from a minimum of £100 to start off with or a minimum monthly DD of £25. The thing I like about it is although the accounts are in the boys' names, I have complete control over them. There is the option to put it in Trust whereby control is handed to the children when they're 18. But to be honest, I know what I was like when I was 18 so I didn't choose that option even though it is a tax saving.
Also, the advantage of 'dripfeeding' money into the account means you ride out the storms of the stock market.

GreyPilgrim

My daughter is 13...I might look into this.

Thanks BM!

Mikeyorks

If the current penchant for 'shoes and handbags' goes with a concern that the items will get ever more expensive as she gets older? Consider moving the money into an account in your name (ISA ideally - if you or the OH don't use yours .. that way you avoid tax implications). Continue through the Halifax 10% .. but then move it shortly after it's hit the Sav4it account?

Nothing worse (read Martin's note in the CTF article) than your child squandering all 'your' hard won savings as soon as the money is available to them. I know there's an implied lack of trust in taking it under your wing .... but that's nothing compared to the actual lack of trust that occurs if they blow the lot. Been there, done it ... blew £10k in his first few months at Uni .. and we're still picking up the financial pieces. Totally sane, totally sensible prior to starting Uni .. then commonsense deserted him.

The fact that the 10% account is repetitive ... from their website. So they won't be after you!

When the year’s up, your savings and interest are swept into another Halifax savings account, which you choose when you open your Halifax Children’s Regular Saver.
Your Halifax Children's Regular Saver account remains open, the interest rate applicable at the time is fixed for another year and you simply continue to save using the same standing order.

GreyPilgrim

Mikeyorks wrote: »

If the current penchant for 'shoes and handbags' goes with a concern that the items will get ever more expensive as she gets older?

Try explaining that to a 13 year old girl with money in her hand who 'needs' that bag....

Mikeyorks wrote: »

Consider moving the money into an account in your name (ISA ideally - if you or the OH don't use yours

Nah, we just about manage to fill ours now, so there's no room left over

Mikeyorks wrote: »

The fact that the 10% account is repetitive ... from their website. So they won't be after you!

Thats put my mind at rest. Cheers matey.