Child savings account. Confused!!!

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Reggie_g
Reggie_g Posts: 3 Newbie
in Savings & investments
Hope some can help please.
I am looking to open a regular savings account for my 7 month old baby. I thought I had cracked it by simply getting a high rate Halifax saver. I realised, like an adult account that it only fixes for a year! If that's the case I could potentially have the hassle of opening a new one every for 18 years to keep the money making half decent interest.??

Then it dawned on me if i am correct, that if after a year I want to move my money, I can't move to another high interest regular saver because I will then have a lump sum that you generally can't deposit into that type of account. I suppose the easy answer is to put it in a isa but surely there is something I am missing!?!

There is nothing on the internet explaining anything about it. Help would be greatly appreciated
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  • Alexland
    Alexland Posts: 9,653 Forumite
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    Yes the high rate savers are a pain as the banks don't want you building too high a balance as it costs them money to provide the artificially high interest rate.

    Have you considered a stocks and shares Junior ISA investment which should hopefully grow above inflation without needing so much messing around?

    Alex
  • Reggie_g
    Reggie_g Posts: 3 Newbie
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    Makes sense I am just very uneducated in that field so wouldn't really know where to invest.
  • enjoyyourshoes
    enjoyyourshoes Posts: 1,093 Forumite
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    Use the RS to build annual pot,

    Then put this pot into a high interest account (santander, HSBC & halifax kids a/c-currently, but will be different next year when your RS matures)

    Use these accounts to drip feed into multiple RS until they mature and repeat (including adding investment in S&S ISA (more risk attached)

    You have to manage the accounts though and move when a better rate appears.
    Debt is a symptom, solve the problem.
  • enjoyyourshoes
    enjoyyourshoes Posts: 1,093 Forumite
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    Sorry HSBC kids account has minimum age above your childs current age, apologies for duff info.
    Debt is a symptom, solve the problem.
  • Alexland
    Alexland Posts: 9,653 Forumite
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    Reggie_g wrote: »
    Makes sense I am just very uneducated in that field so wouldn't really know where to invest.

    Learning more could be the best investment you could make to help the baby. Worth looking at Vanguard who are one of the world's largest fund managers and run on a not for profit basis so are very low cost:

    https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-junior-isa

    In particular they run target date funds which automatically reduce volatility as the withdrawal date gets near they are usually used for retirement but they could also be used for a child turning 18 (such as the Target Retirement 2035 fund):

    https://www.vanguardinvestor.co.uk/what-we-offer/target-retirement-products

    The value of the investments will go up and down during the next 17 years but the trick is to hold your nerve, know you are well spread around the world and historicly markets have always recovered.

    Alex
  • MallyGirl
    MallyGirl Posts: 6,627 Senior Ambassador
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    Reggie_g wrote: »
    Hope some can help please.
    I am looking to open a regular savings account for my 7 month old baby. I thought I had cracked it by simply getting a high rate Halifax saver. I realised, like an adult account that it only fixes for a year! If that's the case I could potentially have the hassle of opening a new one every for 18 years to keep the money making half decent interest.??

    Then it dawned on me if i am correct, that if after a year I want to move my money, I can't move to another high interest regular saver because I will then have a lump sum that you generally can't deposit into that type of account. I suppose the easy answer is to put it in a isa but surely there is something I am missing!?!

    There is nothing on the internet explaining anything about it. Help would be greatly appreciated

    You will have to find a new home for the £1200 plus interest when the year is up but you don’t need to open another RS - that just rolls on from year to year with the Halifax. The Halifax has a JISA with a reasonable rate for cash, or you could go S&S with the timescales available for your baby.
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  • xylophone
    xylophone Posts: 44,426 Forumite
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    Does the child have a JISA?

    https://www.gov.uk/junior-individual-savings-accounts

    Currently the Coventry BS offers the best rate for cash.

    https://www.coventrybuildingsociety.co.uk/consumer/savings-accounts/cash-isa.html

    Below might be worth a look for stocks and shares.

    https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-junior-isa?cmpgn=PS0517UKPAJIS0002&gclid=EAIaIQobChMI7t2pvYG42AIVjrDtCh1pNQZZEAAYASAAEgLkPPD_BwE
  • Reggie_g
    Reggie_g Posts: 3 Newbie
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    Thanks for the reply but my issue with something rolling on is you usually get a lot worse of a deal. They fix it for a year and then revert to a poor rate for your money. There seems to be a few mentions of stocks and share isas
  • Keep_pedalling
    Keep_pedalling Posts: 16,636 Forumite
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    Reggie_g wrote: »
    Thanks for the reply but my issue with something rolling on is you usually get a lot worse of a deal. They fix it for a year and then revert to a poor rate for your money. There seems to be a few mentions of stocks and share isas

    With a child this young I would certainly would be looking at a S&Ss JISA. Our first grandchild is 3 months old and we got our son to open a JISA with Vanguard, and we have put in the full allowance into LS100.

    The best you can hope for with cash JISAs is that they just about keep up with inflation.
  • louloubelle79
    louloubelle79 Posts: 411 Forumite
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    Hello
    I recently opened for my DD 9 DS 7 a JISA with One Family, and child pensions with Legal and General with £20 going in per month each account. Hoping this will give them a better start than I did.

    There are prob better rates out there now for JISAs though. Quidco also offer cash back on some JISAs.
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