Aargh - Child account needed - largeish deposit with decent interest rate

[Snookie00]

Struggling to find a suitable product and would appreciate some tips. My kids (aged 10 and 12) are inheriting about £12,000 each from a relation abroad. I’ve been asked to provide bank account details so that the cash can be transferred to them. They don’t have an account at the moment so I need to open something ASAP.

There are plenty of regular savings accounts for kids but I’m struggling to find one which will allow the large initial payment and pays an ok ongoing rate. I’m relaxed about it being locked until they’re 18 so don’t need easy access to the account.

Any advice?

Does anyone have any

I’d put it in a junior stocks and shares isa if it’s a long term savings vehicle you need

You will need an account that isn't an ISA first though 12k is way over the limit! Coventry building society do a good junior cash isa, if thats what you are after.
I'd find a generic kids account (eg nationwide, or ask your bank if they can offer something better) for the money to be paid into, then transfer this year's amount to an ISA, and maybe invest the rest.

Rather than rush into anything could you have the money transferred to your account while you do your research

Have you thought about premium bonds? I've done this due to interest rates being so low at the minute, u could always change it

Think I’ll have to put it into standard accounts for them first then look to shift. I might drip feed it into an ISA over the next few years. I think it has to stay in their name which I’m perfectly happy with as this is their inheritance from their dad who sadly died far too young. I’d like it to be secured so they can’t fritter it away during their teens but also fear that giving them a lump sum at 18 is crazy too. Any way I can lock it up until they pass an emotional maturity test of my choosing ?

You can put it in a 5 year bond the day before they get to take responsibility for it...

The problem there DustyDoorframes Is that most long term bonds are only available to over 18s, so Op would find it difficult to open a bond the day before they turn 18!!!! Once they hit that birthday, most accounts will become theirs and Op will be locked out of any online logins.

I sometimes see people saying “don’t tell them about the accounts”y but unfortunately the financial institution will do that for you, writing to them as their birthday approaches.

Op - my two inherited an almost 6 figure sum when 17 & almost 15. They are both over 18 now so the money is in their name. Whilst it’s a risk letting them have control, we had no choice as the will didn’t state an older age.

We have talked a lot to them about how lucky they are, how it’s their house deposit and how, if they fritter it, we won’t replace it (even though we could afford to gift house deposits). So far so good, both are being sensible. The money is being drip fed into S&S ISAs monthly and remainder spread across 1,2,3 yr bonds. Maybe we have been lucky, but I am a great advocate for financial education and involving them. DS has started to put some of his into individual shares, just dipping his toe into buying them.

Both hope to travel in next year or 2, both are saving from earnings (gap year and year in industry jobs) but I have also said that if they need more, then they can use some of the inheritance. I don’t want them to think they can’t touch any of it, it’s a balance between saving the majority but travelling whilst young and free.

Thanks Sophie for the feedback. They will be getting more money from my side of the family so I suppose I should use this as an opportunity to teach them more about finances. I’m very prudent with money so they already know the basics and I’ll keep them informed and start involving them in how we can invest for them.