Which savings account?

[halfbuffy]

I'm planning waaaaay ahead and want to put money aside each month to pay for a mega Disneyworld trip for my DD's 10th birthday....she's 3 months old now but I want to be able to put little away each month so that we can give her a big bells and whistles trip when she's older but not have to suffer the financial hit nearer the time! My parents did something similar for me when I was younger and I would love her to have the same experience and memories that I did.

My question is what type of savings account would be best? A regular savings account or some sort of ISA? I don't have the initial £500 deposit that I've seen some accounts need and I'm with Halifax so would I get better interest rates going with one of theirs because I'm an existing customer?

Look at money saving expert - there is really good advice and comparison of current interest rates on there.

Adult ISA rates now tend to be less competitive because basic rate taxpayers now have an interest allowance of £1k per annum before tax is payable.

Junior ISAs allow no access until the child is 18 when they are entitled to the lot.

Banks give no bonus rates for existing customers, in fact the opposite can be true when they reduce rates after a year or so.

Halifax have a good savings account for children. I think you can deposit £10-£100 a month. You can't withdraw, and it closes after a year, when you transfer the funds (possibly to their Young Saver) and start again. It's called the Kids Regular Saver.

Have you looked at getting a Santander 123 for yourself ?
Just that the interest will not be taxable for the first few years (rates are too low) and the cashback clocks up pretty fast ...

Regular savers from HSBC / first direct and m&s

I use multiple of these and restart each year as have to put in every month for a year to get the interest which is 5 or 6%

Keep in mind that Regular Saver products whilst having a good interest rate headline, don't given that percentage on all the money.

What do you mean ?
Your sheet shows a reverse sum of the digits
but that is not how the accounts work

If you put in £300 a month and it gives 5% APR, then you get 5% on that £300 as it is in the account for an entire year. All other amounts are not in for an entire year, so get less. So the £300 in month two gets 11/12th of 5% as it is in the account for 11 months.

Maybe some accounts work differently but to me that is how regular savers appear to work.

Ah ok, but your sheet made it look like the amount of interest would decline each month and that is NOT the case.

I realise that but still better than 1 or 2%

Could be presented differently, that list was done about a month ago when someone asked why they got that amount of interest at the end of the year when they had £3600 in the account.

Regular savers are certainly useful to get a bit better return.

Buy some stocks-interest rates are so low you practically loose money by putting it in an account.

Thanks for your help everyone! I've got a separate thing on the go with an investment company that's for her in the real long term (help her with house deposit/wedding type thing). This one is for the family really because it'll be for all of us to go!

I'll definitely bear in mind the interest rates though, I hadn't thought that they were that bad in the grand scheme!