Saving for dc

[bananamushy]

Hello all,

Thinking about the dc now & saving for the future. What's the best option? Normal savings account or ISA? What do you guys do?

I’ve got a mix of fixed savings accounts, children’s current accounts and a junior stocks and shares isa for my two. Money saving expert website good for checking out the best interest rates at the present time.

Thank you, I looked at mse but was a bit overwhelmed. Are the accounts all in the dcs name?

Yes they are. The fixed savers and the current you can withdraw the money before they children are 18, which is good if you need access to that extra cash in the future, but the S&S ISA will be essentially locked away until they are 18.

can i ask what the difference between fixed savings & current account are?

Who is your ISA with? I opened my own one with Vanguard but didn't know whether to use a different platform for dc.

Do you mean the difference in basic principles?

A fixed saver one would usually pay a fixed monthly sum, say £25-250 per month for a period and get a fixed interest rate for that period. Can get 1, 2, 3 or 5 fixed savings account normally. Ours is with Halifax, pays 3.5% for the year. Can pay maximum of £1200 in that year. Got one for both kids.

A current account like Santander Mini Account pays 2.96% for amounts up to £2000. It's just a current account for the kids, it happens to have a reasonable rate of interest, but only for £2000.

ISA is with AJ Bell, purely because I have my adult investments with them too and their fees are quite low. You can get vanguard funds through them etc..

Yes that's what I meant, thanks for your help.

Open a JISA for the kids. If you don’t have a wide knowledge about stocks and shares, then look into funds. For your kids, you will want global equities as the money will remain in the JISA for a long period of time. Some suggestions of funds which are medium risk (no funds are low risk)- Vanguard Life Strategy 80 or 100%, Fundsmith Equity but DYOR.
Bank accounts are dead as they pay no interest and your kids money will slowly lose its worth over time.

Thank you @Redcart21, I've just had the savings sitting in my account which as you say is not doing anything.

I've got a stocks and shares isa which isn't doing too well. So I've stopped paying in to that and have opened savings isa as well. £50 a month.

I have a JISA in cash for each DC. We also have a sum in investments - a maxed out ISA and another investment account - held in our own names but intended for them. I use Cushon as I get discounted fees as a work benefit.

I don't understand why people use JISA's - the money becomes the child's at 16 which is utter madness.

I use a nutmeg pot for each child, on medium high risk. I don't pay tax unless I make 12k a year gains, which I won't. So all the advantages of a JISA, none of the risks.

DD's has grown 14 percent this year