Savings accounts for children

[LauraIngallsWilder]

Hi
I need to set up bank accounts for my children (aged 10 and 7) which I have to confess I have never done before

About £200 will be put into them initially (inheritance) then their own savings (birthday money etc)
Ideally I would want them to have an account with an ethical bank but it also needs to be a bank they can go into themselves iyswim (and our small town doesnt have a branch of an ethical bank)

So the choice is
Barclays, Lloyds, Natwest or HSBC

Which should I go for?

All help appreciated :)

Hmm not sure for which bank buuuut my dad keeps telling me about new children's isas think they are new or just about to come out and he says I should open the kids one each.

My understanding is that child ISAs will only be available (at least at 1st) to children who didn't qualify for a child trust fund. So, the OP's children will be too old for a child ISA.

Martin Lewis on MSE will probably have a guide to the best children's savings accounts. He also has an article on how to explain the benefits of saving in a bank versus saving in a piggy bank to children. I liked it .

You could also check out the w/e Guardian, it has best buys tables in it, one of which will be a best buys children's savings accounts.

Northern rock has a 3% interest current account for kiddies though, and HBOS has a ~5/6% regular saver for children (so you have to put in £10-£100/month for 1 year). Sorry, I'm not sure about the other banks that you mention!

Martin Lewis does say that you could put all of the £ in the best account, then open a couple of others with the minimum deposit (often £1) to get the freebies ...

Also, don't forget to fill in an R85 form to make sure that the interest isn't taxed.

Ooh thanks both of you
Im not really looking for a ISA/savings type account - something they are detatched from iyswim.
I need something they can feel a connection too - save up some money and then take it and put it into the account.

Ill check out your suggestions Currentpun........

I don't know where you are in the country but have a look if you have a local building society. There are some smaller ones about, they're often set up quite philanthropically, the rates of interest aren't bad and the pass-book method of keeping track of an account is quite a nice introductory method for children. Whatever you end up with, make sure you fill out any forms that mean the interest doesn't get taxed at source... it's taken off automatically otherwise

cat64, I think that the main benefits of a child ISA are that the £ will get a decent rate of interest, and that at the age of 18, the child proto-adult may have a significant lump sum that's already in a tax-free wrapper.

I should add that I'm not an expert, I'm just that DS isn't eligible for 1!

Cogito -that is a genius idea - yes there is a local building society type thingy here (no idea what it is called though or how to access it)

Im thinking of opening a Halifax account as Ive just remembered we have a branch here - and they do fab interest for the first year (with monthly payments of at least £10)
Ill pop into all the other local banks tomorrow and see what they say!

Thankyou so much for all your advice :)

Are there any accounts that do freebies for children now? This is similar to my post of the other day. DS currently has £110 in a wallet which I think needs to go into an account he can instantly access when he sees something he wants to buy.

There was a time when banks offered piggy banks, book tokens and other small rewards as an incentive. However, over the life of an account, it's best to be a little ruthless about what you're getting long-term rather than be too swayed by short-term sweetners.

Useful MSE link - includes lots of info about children's accounts, and a list of freebie offering accounts too.

Halifax is recommended by Martin MSE at the mo. I've used it for DC and she's just at the end of her 6% year and I'm shopping around for a new account for her

We're at the end of our 6% year too ToothbrushThief. I've been assuming that I can just open the same account again for him?

Parents have had really bad service from Halifax so a bit loathed to go with them.

Oooh currant hadn't considered that? bet it's new customers only

I think you might get round it - what they hope is that you'll just forget about it, and it'll turn into a savings account with a lower rate of interest. I'm going to try it anyway, and if they don't let me, I'll just take his £ elsewhere.

Northern rock have a good current account for children (3% interest rate), but AFAIK it can only be managed in branch. It's a bit of a faff for us as we don't live close to a branch, but I think they print the recent transactions in the book when you go in. They'd closed by the time we got there today .

Of course, if you already have all of the £ already, then putting it in Northern rock at 3% would be the same(ish) as drip-feeding it into HBOS over a year at 6%. Actually, DH is saying things like 'compound interest' to me now, so I'm not sure if that's right...

When we're at the end of our 6% year at the end of this month, I'm planning to buy the Guardian to have a look at the best buys tables, and to have a look at the MSE website.

I have a northernrock 3% account for my DS, but are there any more similar accounts which do not have a bonus year at the start then revert to some appalling interest rate in years 2 onwards, which pay a better rate of interest.