MIL keeps asking about children’s savings accounts

Well an adult can transfer fairly easily from their current to savings and vice versa, they just can't take cash directly out of savings with a card. So I guess it's trying to be like the same but for a kid. So presumably parent is the only one who can add the money from savings to current?

But it sounds like the do have easy access to those savings, if they can transfer money between their savings and current accounts? That set up sounds like the opposite of stopping them having easy access to savings, non?

I think part of the issue on this thread is that actually, setting up 'child savings accounts that grandparents can pay into, without disclosing the quantity' isn't always quite as straightforward as some people seem to think it is.

I set up an aptly titled 'Kids saver' with a high street bank when my son was a couple of years old, which we have direct debited a small amount into monthly ever since. It pays a fairly decent interest rate, for total deposits capped above the amount we were able to save.

When my son was 7 my MIL stated she wanted to start some regular savings for him, and did we have a bank account for him she could send it to? She wouldn't tell us how much money she wanted to save, so in the event that she wanted to save more than the capped amount per month for his 'Kids saver' account, I set up both a cash ISA and a stocks and shares ISA in our son's name.

I then went to sort out the account details for her....

The Kids Saver one, despite being for under 16s and requiring a lot of my son's details to initially set up, is actually in my name. I queried this twice with the bank and they say this is how they set them up.

Its also not the case that my husband and I can't access this money. In fact I withdrew a lump sum to set up his ISAs with last year, via our joint account, as it was the simplest way (and from what I could work out the only way) to do it.

It is, once in the ISAs, 'his money' and is unwithdrawable until he is 18. But that wasn't the case when it was sat in a normal, high street Kids Saver account.

For both the ISAs I set up, one an NS&I children's cash ISA and the other an stocks and shares ISA, as neither are current accounts, you can't carry out simple BACs transfers to them. They involve a fairly complex number of steps for people who aren't the 'registered contact' for a child's ISA. And only a parent or guardian can set up an ISA for a child and be the 'registered contact'.

Its actually quite hard to pre-grease the wheels for a grandparent to deposit unspecified sums of money, with ease, for their grandchildren in a way that keeps that money ring-fenced from the dastardly DIL who bothered to set the whole thing up in the first place...

OP, maybe your husband needs to start having a perusal of the Money Saving Expert website and sort it out with his Mum?

I'd give the children £10 each for their birthdays in cash to spend how they like and I'd save what I originally planned to give to their DIL for them to put by in my own ISA, either to be given to them when I thought they were old enough and sensible enough to spend it wisely, or to be left to them in my will. That way I'd be avoiding unpleasantness with a DIL who doesn't seem to like me.

Tell her she's more than welcome to open her own accounts

https://www.moneysavingexpert.com/savings/savings-accounts-for-grandchildren/

Grandparents can still open accounts for grandchildren but may need parental permission. Suspect DH gave it to IL though would not have said no.

If parent did say no to us in future not sure I'd be handing over the cash to them instead - though here it's birthday money which we see as gifts so kids can buy what they want or save till they see something they do rather than future planning.

Yeah that sounds sensible. Savings you shouldn't have easy access to. But giving the current as well helps them learn about finances.

Why do you think savings in the parent name isn't tax efficient? You can file a tax return for the kids and assign interest to them if needed.

I had a childhood friend who lost most of her monetary gifts - the father kept such a tight grip of the family finances that the mother sometimes emptied the children's money box in desperation. (The mother died when the youngest was a teenager. The teenager was taken into care when her teachers realised that something was wrong. She wasn't being allowed to study for her prelims/mocks after 9 pm, because all the lights had to be switched off to save electricity.)

Kids accounts don't get better rates beyond some nominal amount like 500 or 1000.

My bank sets up two accounts for kids - saving one with no card and a current account one with card when they reach 11 that doesn't allow the account to go overdrawn at all.

They can then internet or phone bank and transfer the money between the two. Older two then at 18 and off to uni opened student accounts with another bank and have current account and savings with them as well.

The card was useful when they started going out and about themselves in teen years and very useful for paying bus fares to college rather than having to find exact change.

Some of the advice on what’s best only applies if you’re saving over a certain amount.

About 25 yrs ago, I was able to open up an account at our local building society for my step-granddaughter. It was specifically for children and the rule was that you could only open it if you were a parent or grandparent.

I thought that I might not be allowed to open it since I was only a step-grandmother, but was told at the branch that I could. I already had accounts of my own at the branch.

I deposited a thousand - maybe not a lot in some people's eyes, but a lot of money for me at the time. (I had initially set it aside as a contribution for the baby's parents' wedding, but it seemed that they weren't going to get married.)

I can't remember what the account was called now - it definitely was not an ISA - but it had a very good rate of interest and had been recommended in both the Guardian and Telegraph money pages.

I later signed control of it over to the child's mother.

It may well be that grandmothers are no longer allowed to open accounts for children.

My IL set up saving account for the kids themsleves - I think DH gave them brith certifcate to do so - they were always in the kids names and nothing to do with us.

We had child trust funds we paid in every month - they got those as well as IL cheque at 18.

Did sometimes have to manage expectations about amount IL were saving- 5K in end -as MIl was exaggerating how much it would be - house buying levels she sometime made out partly inflation passing her by and partly normal exaggeration - but it was a very nice thing for them to do.

We also had funds under DH name for them - those have been used mainly for incidental uni expenses and any left for first job costs.

Birthday money went into the child trust fund when too young to spend it. Then they started spending it so that stopped. Then we realised there was a lot of money in the house - oldest was a teen - so we opened child saving and current account for them - which they then controlled - with cards that can't go overdrawn. Been useful to them - they then kept birthday money mix of cash and in their accounts - useful for college and get money for buses to them.

I was astonished when it came out DN who worked and earned since 16 had no bank account her wages were paid into her mum bank account - that didn't stop till she was past 18.

I don't see why you can't easily open a child account in their names and give that to DH family to pay money into - and keep the ones under your name to manage how you want as well.

I'm a bit 50/50. I understand wanting to save gifts in the GC's accounts (although asking to see the birthday cash as "proof" of something is a disgusting way to treat your DIL) but the decision on how it is managed and when they can access it should be the parents'.

We get money transferred into our current account and since around age 5 have let DS spend half of it before it goes into his Kids Saver. But it's now at 5k and with 11 years to go until he is 18 we're not going to pay into it forevermore. If we start a uni fund/house fund it'll be in one of our ISAs.

People can save for their children in whatever way they like. The most financially savvy people I know do NOT put money in junior ISA's purely because the child can access it at 18 and there's such a high risk it then won't be spend on what the saver intended it for. 18 year olds aren't known for being sensible with money!!

If MIL is that bothered why doesn't she open up an account for them and put the money in herself? Both my mum and MIL did this from when my DD was 3 years old, they did this so they could put regular money away for her to be hers to do with as she wishes when she is older, especially as the child accounts even in trust get better tax deals etc, its a relief as if she wants to do uni/ buy a car/ buy a property etc she'll have a nice lump sum, especially as my mum and MIL passed away a few years ago, so its nice to have that for my DD. But I agree your MIL sounds like she's accusing you and or your husband of spunking your children's money!!

It appears your MIL thinks saving from a young age is important and developing good habits for the future. Having individual accounts in the children's own names is reinforcing this. The way your MIL is approaching this with you may not be the most tactful but she obviously cares. In this instance I would probably just show her the individual accounts, smile and say any contributions are very welcome.

They haven't accused the DIL of anything. The son has now set up children's accounts, which what should have been done in the first place.

What's with implying that her DIL, their grandchildren's mother, is going to do 'what she wants' with it?

The OP is clear - it's the occasional £50 on the kids birthday. You don't get to dictate what happens to a birthday gift.

If they want to invest 'substantial sums of money' (which is neither written nor implied in the OP) then they can do that - buy premium bonds, set up their own accounts, buy a property in their grandchild's name, bury gold under the floorboards or whatever else they see fit.

Or - shocking idea I know - speak to their own bloody son and discuss with him what would be best.

They don't get to accuse their DIL of trying to steal her own children's birthday gifts.

It's not just tax either - there have been a lot of MN posts over the years saying "My parents gave my sibling X but now they are getting divorced and the money they said I would get has gone."

EXACTLY a reason why grandparents might want to properly ring-fence their DGC savings, rather than giving to DIL and potentially losing it all in a divorce.

You've obviously never met one of the many 18 year olds who gained access to savings on their 18th birthday and over the course of the next 18mths blew a load of it on shit.
Not a chance am I opening accounts in my kids names. I'll save the money on their behalf and when they are old enough /mature enough it'll be passed to them to go on something worthwhile like a house deposit. Very unlikely I'd give it before 21, not taking the risk with hard earned money!

They most likely do t want to hand over substantial sums of money to their DIL to do what she wants with it. DIL is the one being a dick here.

What mechanism do you think prevents me doing that?

I can log into my son's account and move the money wherever I want. I won't, but there is nothing to stop me.
E.g. if I buy him a video game on my credit card, he wants to pay me back from his bank account, I can go in and do that by transferring the amount to my bank account.

Yes, we did this until we knew they would be sensible with money. No one had an issue with it.

PIL bought NS&I bonds when they were born and then on every birthday. I noticed that the first one had only DH’s name on as the parent, so I passed it to him in front of them and said that he’s named on it as the managing parent. DH looked at it as if to say what am I supposed to do with this? I think the message got home as the next one had both our names on it. I thought that was interesting as they knew I deal with our finances and yet only put his name on the bond.