recommendations for children's savings account ?

[throckenholt]

I think it is about time we sorted out a savings account for our kids (prompted by receiving a cheque in their name! ).

We are rural, so I guess ideally it needs to be online, with postal (or post office) deposit for cheques, be able to transfer money online. Probably don't need to withdraw cash as long as we can transfer money in and out.
Probably don't want to do regular deposits at this stage.

Any recommendations ?

Most of the main banks offer instant access savings accounts for children that can be managed online with deposits and withdrawals whenever you like, but watch the interest rates being offered as they are as low as 0.75%. If you have £500 or more to deposit and the saver is over 11, the Post Office has an 'Instant Saver' which pays 2.1% gross. I couldn't find reference to a children's savings account on their website but they may be able to help you in a branch. If you'd be happy for the money to stay untouched for a period of time, there are bonds on offer for anything from 1 to 5 years. A 3-year bond at the Halifax, for example, is currently paying 4% gross. Once the bond has been set up you can't add more money to it so they'd still need a savings account. NB.... if you open any account for a child make sure you complete a form declaring them as non-taxpayers. Then they'll get the interest in full.

If you wanted something a little more adventurous/risky than a straight savings account and if they are either too young or too old to have qualified for the Child Trust Fund scheme then you could consider the recently launched Junior ISA. If you did open a CTF for them with the voucher, you could add their savings tothat. Premium Bonds are another popular choice although I don't like them myself.

My DS's day-to-day savings are with Halifax and, when the balance gets high enough, I convert it to a bond. I've also set up regular amounts into a Junior ISA

thanks for your comments.

The kids are 9 and 10 - so not old enough for the instant saver. Also it is more a place for them to put birthday and christmas money and other accumulated bits and pieces - so not anything big - and nothing that interest will accumulate much on anyway.

Previously we have kept all the kids money together in an account of mine in their name - but it isn't one we can pay cheques into. It is pretty much the receipt of such cheques in their names that has prompted this. We could ask the giver to rewrite a cheque in my name but wondered if this was a good time to make the jump to their own accounts.

I am in two minds - they are really still a bit young to make it a very useful thing.

I think a simple savings account is a very good way to get children started in understanding finance. When you've got stories in the press today about people taking out payday loans and not really appreciating what 4900% APR means in reality, it's never too soon to get children familiar with how to look after their money.

Even if the interest isn't much on the amounts they have, they'll enjoy handing over their pass-book, updating the balance and, as my DS put it once, 'you mean they give me money just for doing nothing???!!!' :) I'd make that trip to the Post Office.

Don't ask for the cheque to be reissued and made out to you - money gifted from people other than their parents means it is tax free!

janinlondon

it is such a small amount I don't think tax will be an issue !