Kiddy bank accounts

[TeamC]

I want to open up a bank account for my dd aged 7 mths, in the hopes that her v generous and loving rellies will deposit oodles of cash over the years, in order to pay for her future uni fees / house deposit / new car / shoe obsession
Any recommendations for one with a good rate of interest? Just want a standard, no risk bank or b/soc or post office account.
Thanks in anticipation

We all have accounts(inc Ds)with the Nationwide and find them very good.

Halifax are good.

All our kids have their cash in there.

You also get a money box and bag for the child with each account opened.

my girls have an account with nationwide, also halifax which pays 10% interest if you set up a monthhly direct debit an ddon't take any money out

Do remember that any money you put in their account is treated as yours, not theirs, and will be taxed.

Not true Jan, If the accounts are in the children's names the interest can be paid gross.

We don't get taxed on our kids accounts.

Accounts are in their names, but they won't have access to it until they're older.

Our names are on the accounts in 're' of them.

My kids have a Natwest young savers account and they don't pay tax. I had to sign a form to confirm they were under 18. They get a higher rate of interest than me, even though we have the same amount of money in there (sometimes anyway!)

When I was a baby my mum opened a national savings postal account which required her signature till I was 18 (in fact I only closed it a couple of years ago and used the money for a deposit on a house). Good interest rates! I had a nationwide account when I was older for birthday money etc, also a good interest rate and no problems with teh building soc.
Have chosen a co-op child savings account for ds, as it has ethical credentials etc and supports the born free foundation, ds also gets gifts at different ages that relate to his account and the born free foundation. Has all the usual parental signature requirements until you want to transfer over control.

DD has the co-op acct same as redclover79s ds. Very easy to set up and decent interest rate I think.

Um. Hope no one takes offence, but according the Inland Revenue, if a child earns income of more than £100 per tax year from savings given to them by their parents, it is treated as the parents' income and is subject to their highest rate of tax. The rule applies to each parent individually, so if each parent makes separate gifts of money, the child could receive up to £200 of income before tax is reverted to parents. Financial institutions can certainly pay the interest gross if you ask them to (there is a specific form), but you must declare it to the tax office if it reaches these levels. Otherwise the fines are absolutely horrendous. Honest!

Just checked to see whether a bank would have to tell you when to deregister the child's account from the tax free status, but it seems to be up to you individually to do this. They are not at fault for not advising you: (From the Inland Revenue site)"If a parent gives a child £2,000 which earns £98 interest the interest belongs to the child for tax purposes and the account can be registered for gross interest. But if the £98 is added to the account, leading to £101 interest being earned in year 2, the interest has now exceeded the £100 limit. This means it now belongs to the parent for tax purposes and the account cannot remain registered gross. If the account holder asks they should be told to cancel the registration." So it seems its up to you to declare it.

Does that just mean the interest though or the amount you put in?

Interest DelGirl

They'd have to have a fairly healthy balance to make £100 in interest I would have thought. My dd is only 19mths though so not got a huge amount in hers yet

only just seen your 12:19:04 post

I take offence Batters!! Am I not a Goddess in all other ways???? (Don't answer that!)

The £100 limit only applies to money from parents, though. If the money comes from other sources (grandparents, godparents -- you might need to keep records of who the money came from) then the child can receive taxfree interest up to the level of their personal allowance. But at that sort of level for a 7-month old you might be wanting to look at a unit trust tracker fund or something.

Agree that Nationwide are very good. They're not always the market leader in interest rates, but their rates are consistently good, so if you can't be bothered chopping and changing to chase 0.5% on the rate, then Nationwide are a good bet.

I accept that Jan is correct in her technical tax knowledge, however allowing a generous rate of 6%pa for children's accounts, you would need to have in excess of £1667 in the child's account for it to attract interest of £100 per annum. And I think you'll find that a lot of banks will not allow that much in children's - for example Halifax will not allow you to more than £500 in a child's account- the balance can be higher as they allow the interest to continue to be added.

My kids have loads more than £500 in Halifax account.
Have also made more than that in a single deposit and nothing was said to us about £500 limit.

Think i need to look again to find out where i stand with their cash!!!!

I buy premium bonds for them instead of a bank a/c