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  • FIRST POST
    • Reggie g
    • By Reggie g 1st Jan 18, 2:16 PM
    • 3Posts
    • 0Thanks
    Reggie g
    Child savings account. Confused!!!
    • #1
    • 1st Jan 18, 2:16 PM
    Child savings account. Confused!!! 1st Jan 18 at 2:16 PM
    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
Page 1
    • Alexland
    • By Alexland 1st Jan 18, 2:18 PM
    • 2,552 Posts
    • 1,931 Thanks
    Alexland
    • #2
    • 1st Jan 18, 2:18 PM
    • #2
    • 1st Jan 18, 2:18 PM
    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
    • By Reggie g 1st Jan 18, 2:33 PM
    • 3 Posts
    • 0 Thanks
    Reggie g
    • #3
    • 1st Jan 18, 2:33 PM
    • #3
    • 1st Jan 18, 2:33 PM
    Makes sense I am just very uneducated in that field so wouldn't really know where to invest.
    • enjoyyourshoes
    • By enjoyyourshoes 1st Jan 18, 2:39 PM
    • 1,061 Posts
    • 1,302 Thanks
    enjoyyourshoes
    • #4
    • 1st Jan 18, 2:39 PM
    • #4
    • 1st Jan 18, 2:39 PM
    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
    • By enjoyyourshoes 1st Jan 18, 2:42 PM
    • 1,061 Posts
    • 1,302 Thanks
    enjoyyourshoes
    • #5
    • 1st Jan 18, 2:42 PM
    • #5
    • 1st Jan 18, 2:42 PM
    Sorry HSBC kids account has minimum age above your childs current age, apologies for duff info.
    Debt is a symptom, solve the problem.
    • Alexland
    • By Alexland 1st Jan 18, 7:38 PM
    • 2,552 Posts
    • 1,931 Thanks
    Alexland
    • #6
    • 1st Jan 18, 7:38 PM
    • #6
    • 1st Jan 18, 7:38 PM
    Makes sense I am just very uneducated in that field so wouldn't really know where to invest.
    Originally posted by Reggie g
    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
    • By MallyGirl 1st Jan 18, 8:18 PM
    • 2,733 Posts
    • 7,745 Thanks
    MallyGirl
    • #7
    • 1st Jan 18, 8:18 PM
    • #7
    • 1st Jan 18, 8:18 PM
    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
    Originally posted by Reggie g
    You will have to find a new home for the £1200 plus interest when the year is up but you donít 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.
    • xylophone
    • By xylophone 2nd Jan 18, 12:23 AM
    • 25,555 Posts
    • 15,091 Thanks
    xylophone
    • #8
    • 2nd Jan 18, 12:23 AM
    • #8
    • 2nd Jan 18, 12:23 AM
    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=EAIaIQobChMI7t2p vYG42AIVjrDtCh1pNQZZEAAYASAAEgLkPPD_BwE
    • Reggie g
    • By Reggie g 4th Jan 18, 8:33 AM
    • 3 Posts
    • 0 Thanks
    Reggie g
    • #9
    • 4th Jan 18, 8:33 AM
    • #9
    • 4th Jan 18, 8:33 AM
    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
    • By Keep pedalling 4th Jan 18, 9:17 AM
    • 5,088 Posts
    • 5,667 Thanks
    Keep pedalling
    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
    Originally posted by Reggie g
    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
    • By louloubelle79 4th Jan 18, 10:00 AM
    • 335 Posts
    • 176 Thanks
    louloubelle79
    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.
    • Keep pedalling
    • By Keep pedalling 4th Jan 18, 10:30 AM
    • 5,088 Posts
    • 5,667 Thanks
    Keep pedalling
    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.
    Originally posted by louloubelle79
    Look at overall costs rather than things like cash back. vanguard charge 0.15% platform fee plus 0.22% for their LS funds, The One Family JISA has a 1.5% management fee which is very expensive.
    • Alexland
    • By Alexland 4th Jan 18, 10:01 PM
    • 2,552 Posts
    • 1,931 Thanks
    Alexland
    Agreed you need to be very selective when taking out products through cashback sites. Sometimes the offers are really good but I agree the One Family is a stinker as the high compound fees will errode the return.
    • Westie983
    • By Westie983 6th Jan 18, 1:05 AM
    • 4,354 Posts
    • 14,910 Thanks
    Westie983
    You have some good advice here.

    I would suggest a JISA as this is better for long term rather then using regular savers which you have correctly noticed is only for short term build up, that said nothing wrong with using regular saver for a year, moving the money to a higher interest account and start again with the regular saver.

    Eventually you will build up the funds in the savings account or whatever account you have chosen to received the funds from the regular saver.

    Good luck I hope you find something suitable.

    Westie983
    Save 12k in 2018 #10 Total (£25,000)+£10,000/£12,000 = 83.33%
    Sealed Pot Challenge ~ 11 #97 Total (£410) + £40/£500 = 8.00% ( x 11)
    Xmas 2018 £1 a Day #2 Total £62.59/£365 = 17.14%
    Virtual Sealed Pot #1 Total £900/£1,000 = 90.00%
    £2 Savers Club 2018 #16 Total (£1,500)+-480/£2,000 = 51.00%

    Total £12,022.59/£15,865 = 75.78%

    I'm a Board Guide on Budgeting & Bank Accounts, Debt-Free Wannabe, Disability Money Matters, and Savings & Investments. I'm a volunteer helping the boards run smoothly, but I'm not a moderator, and do not read all posts. If you see an inappropriate/illegal post then email forumteam@moneysavingexpert.com
    • Flobberchops
    • By Flobberchops 6th Jan 18, 11:43 AM
    • 742 Posts
    • 530 Thanks
    Flobberchops
    I have the same Halifax Reg saver and I'm pretty sure it automatically empties itself after a year into a standard children's savings pot - but the regular saver itself remains open meaning you don't have to open a fresh one or set up a new standing order. I discovered this the hard way after booking myself in to see a Halifax advisor on the mistaken assumption that the product would have to be manually renewed each year, and subsequently receiving some of the shabbiest customer service I've had in my life, but that's another story.

    The setup I have for my daughter's cash savings is - for simplicity - all held with Halifax. I pay a standing order into the Kids Regular Saver (4.5% interest). After a year this gets auto-dumped into a Young Saver (2%). I then make the annual pilgrimage into a branch and ask the balance be transferred to her cash JISA (3%) where it will sit until she's 18. She has a Stocks and Shares JISA elsewhere that gets the lions share of funding but that's how I deal with the cash part of her portfolio, and it's the best compromise I've found so far between ease of access, passivity, and returns. Your mileage may vary! (Apologies if I have any of the account names or interest rates not quite right; I'm going on memory here).

    Best of luck, there's some good advice on the forums but my key suggestions would be 1) Don't worry too much about cash, a Junior Stocks and Shares ISA is what your kid will thank you for when they're 18 and 2) Keep the cash simple, changing providers twice a year to extract every last tenth of a percent out of competing interest rates is a part time job that you're not getting paid for!
    I work for a UK bank, but any comments made on this forum are solely my personal opinion. Caveat Emptor!
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