Young Savers Interest Rate Reduction
TopCat1963
Posts: 2 Newbie
New to this, so bear with me. My son has had a young saver account with Lloyds Bank since he was born 5 years ago and it paid 2% upto £20K and 0.2% after that. Fair enough, that's what was advertised. Now they are changing the rules in July, so 2% is only payable upto £5K and 0.2% after that. Now that he has £20K in his account, interest was good but won't be after July. Does anyone have any recommendations on where to deposit £15K for a good interest rate for a young saver
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Have a look here, https://www.moneysavingexpert.com/savings/child-savings-tax-free childrens savings options.
Westie983I’m a Forum Ambassador and I support the Forum Team on the Banking & Borrowing, and Reduce Debt & Boost Income boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySaving Expert.Save 12k in 2023 #58 Total (£4500.00) £2500.00/£5000 = 50.00%Sealed Pot Challenge ~17 #24 Total (£55.00) £0.00/£500 = 0.00%Xmas 2023 £1 a Day #13 Total (£85.00) £344.00/£365 = 94.24%Virtual Sealed Pot #1 Total (£500) £550.00/£500 = 110.00%£2 Savers Club 2023 #17 Total (£25.00) £45/£300 = 15.00%The 365 1p Challenge 2023 #7 Total £656.19/£667.95 = 98.23%Total £4095.19/£7332.95 = 55.84%0 -
You are aware of the "£100 (per parent) rule" if the money has been given by parents?
https://www.gov.uk/savings-for-children0 -
Thanks for the replies. The post on new accounts that are available are just to tie you in for a year, paying in a max monthly amount for the year, then back to hardly anything after that. But my question was where best to move the amount of money, i.e. £15K that the young saver account will now only get 0.2% interest and still be for a young saver.0
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I received a letter in the post today from Halifax advising of a very similar change (same banking group so no real surprise). Their instant access children's saver is also having its interest tier changed from £20k to £5k.
That does suggest a solution for you though maybe - open the equivalent product with Halifax. Also I spot in the account information that you can open two accounts per child. So that's £10k earning 2% with Halifax, £5k with Lloyd's... you sure they don't offer the same two per child rule? Also is it important to you for all of it to be instantly accessible, what about Junior ISAs?
What about cycling some money too, you know you could be getting 4.5% on £100 a month using a Halifax Kid's regular saver?: )0 -
TopCat1963 wrote: »Thanks for the replies. The post on new accounts that are available are just to tie you in for a year, paying in a max monthly amount for the year, then back to hardly anything after that. But my question was where best to move the amount of money, i.e. £15K that the young saver account will now only get 0.2% interest and still be for a young saver.
If you keep scrolling down, you get to the easy access and fixed rate accounts.
https://www.moneysavingexpert.com/savings/child-savings-tax-free#normal1Did you really mean to put loose?
Lose: no longer possess, not to retain, unable to find
Loose: not firmly or tightly fixed in place0 -
TopCat1963 wrote: »Thanks for the replies. The post on new accounts that are available are just to tie you in for a year, paying in a max monthly amount for the year, then back to hardly anything after that. But my question was where best to move the amount of money, i.e. £15K that the young saver account will now only get 0.2% interest and still be for a young saver.
How far down the list did you look?
As far as the Nationwide Smart Limited Access Account?0 -
I also got a letter from Halifax today about interest rates, so I'll be keeping an eye on this thread......0
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Also had the letter from Lloyd's. I don't particularly want to let the balance in ours get to £5k anyway, the money is better off invested in my opinion.0
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The market does appear to have reduced its top rates of interest to between £2k - £5k so finding a kids account which pays a decent rate on a higher amount will be tougher to find. Saying that Nationwide are offering 2.75% up to £50k but you can only take out of it once, so if you are saving and not touching the money this is a good option.
If you want full access to the funds, if your child uses it for their spending for example then Lloyds / Halifax / Bank of Scotland may still be the best options.
However like Flopperchops said, you can open up two accounts per child so if you do this you are starting to get back to the original rate on your money, albeit with additional accounts.Save £12k in 2020 = £4,074.62/£15,000 (27.2%) #89
Save £12k in 2019 = £13,580.52/£15,000 (90.5%) #92
Save £12k in 2018 = £17,189.12/£15,000 (115%) #360
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