To ask for your opinion on kids bank accounts?

[Cardiffclare88]

I'd like to open an account for my newborn DD, what recommendations do you have? Obviously for savings but what should I look for? Would like her to have access when she's a teen.

Personally I dont believe in it. There is another post

@Confusedbeetle, why? I reckon if I put her child benefit in every month she'll have a nice pot she can use for uni, etc, or we can invest for her at that time?

Following, I presently save Premium bonds for mine but think there may be a better way

I wouldn’t give a teen unsupervised access to a large pot of cash that had taken me years to save. Save it in your own account and give her the cash when she’s mature enough. Or save it for a specific purpose eg a house deposit.

Most banks will do kids savings accounts. My kids have them with bank of Scotland. They also have child trust fund accounts as they were offered by the government at the time

I opened an account for dd when she was a few weeks old- it can’t be accessed by anyone until she’s 18 (and even then, I think I’ll be insisting on it being reinvested until she’s 21).

I don’t contribute to it regularly, but my parents and sister (dd’s Godmother) will put away a few quid for birthdays and Christmas etc instead of adding to her mountain of toys etc.

My dad organised something similar for my sister and I when we were small, and the savings paid for the deposit for my new car and my (cheap!) wedding in my mid-twenties a few years ago.

I think it's a great idea but have no great advice about what. My parents saved my various child benefits or whatever they were back in the day and they had a nest egg in the region of £25k which they used for my university education. My dad gave me £270 living money for food etc by direct debit and paid my halls costs out of that money until it was depleted. It only depleted because I cocked up and ended up doing 8 year at uni. I funded my own latter years. My gran also put aside money for me in one of those accounts that changes into the child's possession when they turn 16...that was 13 years ago so I don't know if they still exist! I still have that account untouched. It was going to be for my first car when I left uni but I 'inherited' my mum's old car when she upgraded so never used it for that. It will likely go towards a house deposit soon.
So I'm definitely in favour of saving for your child. My parents' planning ahead 30 years ago has helped me A LOT. And if I were to have a child myself, I would do the same thing.

Savings account. Open a current account for DC day to say use when they turn 11.

Ours had accounts from birth, and birthday and Christmas money has been paid into them along the way. Now they're all adults, they have enough money to do some travelling, buy a car or pay a rental deposit on a flat. They've dipped into it recently to pay for festivals. The money is accessed by a passbook, which I look after for them, so the money isn't for day to day expenses.

DH and I also paid the equivalent of child benefit into a policy to pay out around the time they started uni. We've been able to absorb the uni costs topping up their loans, so the policy payout will now pay for a cruise for me and DH!

IME, you just move it around every couple of years.
Go on to Martin Lewis's Money saving expert website to see the best you can get now, and review each year.

If you are planning more children, keep in mind about being fair to both / all.

I wouldn't give it them too early. Wait until they are of an age when they understand the value of a lump sum, a bit more.

I opened a building society account for DD when she was tiny and I used to put the child benefit in there. The intention was that this would be used when she went to Uni to avoid having a loan. She knew about it and also knew what it was for so never asked or expected to access it as a young teen, even though it was in her name. (It was in her name because as a non-taxpayer she didn't have to pay tax on the interest)

Of course, before she got to Uni they had introduced £9K tuition fees so there was no way it would cover that! However, it did mean she could avoid getting an additional loan for living expenses without it costing us a fortune.

Google "Junior ISA" and have a look at some recommendations. Vanguard do one.

Very good idea. Open one and keep putting the Child Benefit into it, after 18 years of compounding interest then your child will have enough for a house deposit. If you can convince them not to blow it all at 18 then they could even just leave it alone and use it for a retirement account in 50 years time.

Both mine have junior ISAs that they can't touch until they are 18. They get £100 cheques twice a year from their great grandad, it goes into the ISA at his insistence. They also have standard children's accounts attached to my bank account, their child benefit and other adhoc money goes into for day to day wants and needs.

For long-term savings (18 years) that you will be drip-feeding into, a junior stocks & shares ISA could give a better return than a cash savings account. If you are saving all the Child Benefit from this point, then it could get up to nearly £20k - think about if you want that to automatically go into her name at the age of 18...

Can you afford to do a monthly payment? Some regular savers have great interest rates. Put the money each month for a year. Then withdraw the money you put in. Leave the interest and repeat....

Premium bonds

I don't believe in premium bonds for kids if there will be siblings - although interest rates and overall value will differ from child to child, the thought of one being significantly better off than the others doesn't sit well with me.
I think kids accounts are much of a muchness and obviously more tax efficient than saving yourself. My kids' accounts cannot be transferred though - from the sounds of things other accounts can which would be better.
I don't think a lump sum should be used on rent or education though - it's more a house deposit or a year travelling at an absolute push. If your education is adding value to your future earning potential, self fund or borrow. 20 odd years worth of savings takes a lot to replace and can make a huge difference if kept intact. Just my non IFA opinion!

I really couldn't decide what to do for the best on this, so did nothing. DS is 7 now. If we have money to share with him when he's 18, he can have it. Right now, we don't. If I'd locked money away in an account we couldn't access, then DS would be worse off right now.

I am planning to sell our house and downsize when he goes to uni and/or moves out. That would give us some money to share, but crucially, we would still be in control of how much and can heavily influence what he spends it on. We might buy him a car for instance. I expect to release about £150k at this point, but I have no pension. We will do the best we can.

Waste of money (especially at a time of such low interest rates). Invest or spend it on their education.

Thank you yes, not planning to give it to her as pocket money at 18 So it sounds that a junior ISA is good until she’s older and then we can transfer to something else for her?

Once she's 18 a junior ISA would turn into a regular adult ISA in her own name. She wouldn't need to do anything to it.

I opened savings accounts for all my 3. Always nice to put something away when it's possible to give them when older towards a car, uni or house etc.

Can what are premium bonds ? How do they work ? I remember working as a cashier in a bank and seeing people depositing cheques for between £25 and £100 for premium bonds but never really understood them.

Currently my lg has a Hbos access savings account and receives a couple quid each month interest which isnt great obviously.

I thought the money in junior ISAs could only be accessed by the child (albeit perhaps not until they reach a certain age). Is that not the case?

I wouldn't have trusted myself to be sensible with a large sum of money at 18. And I was actually a very sensible teenager overall!

I wouldn't have trusted myself to be sensible with a large sum of money at 18

Definitely a concern. I think good financial education by schools and parents is vital, and really lacking at the moment. At 18 I didn't have a clue what an ISA was.

In fact there was a misunderstanding my first year at university and my first year's maintenance loan was paid to an account I never used. I only discovered it at the end of the year. I spent it all on a computer. Sometimes I open up a compounding interest calculator and kick myself for not investing it!