Savings account for children

[mayflower21]

Please recommend where to open one and how?
Have a toddler.
Would you do a traditional savings account in a bank, or something else like trust fund?

Honestly, the interest rates are soooo low at the moment, I'd be inclined to buy premium bonds for the foreseeable. They can be purchased in small increments, and it's pretty easy to cash them in if you want access to the cash. And there's always the possibility you might win ££££

Many people say their PB winnings work out more than the amount they would receive in interest from a savings account.

I’ve got a 2 year old and last jan I opened just a traditional bank account as I’m not bothered about bonds and best intrest, I just wanted a simple account what she will need when she’s older and I am putting in it every month until she’s 18
I’m holding £1000 a year so she has enough for lessons, car and all that :) x

I’m hoping *

Halifax do good children's accounts with much better interest rates than adults ones

@BMWqueen

I’ve got a 2 year old and last jan I opened just a traditional bank account as I’m not bothered about bonds and best intrest, I just wanted a simple account what she will need when she’s older and I am putting in it every month until she’s 18 I’m holding £1000 a year so she has enough for lessons, car and all that :) x

So that's 1000 chances per year of winning several million pounds you're missing out on.

Actually it's more than that, it's cumulative.

Trust fund or junior ISA. Over 18 years the returns will be much better and smooth over fluctuations in stock markets. If you save £60 cash per month for 18 years you’ll. have paid in just shy of £13k, interest rates are low so negligible returns on a cash account.

Assuming 5% growth in a stocks and shares ISA then the pot will gave grown to £18k plus. Historically returns have been greater than 5% so could be more.

You are taking a risk but the time frames are favourable. Sticking money in a cash account with inflation means you will be losing money each year.

My DC earned significantly more than the 5% illustration used.

Hi
I don’t understand anything else other than it’s just easier for me with a standard bank account
sorry but im just thick shock if comes to the things mensioned above

Thick when it comes*

Don't describe yourself as thick @BMWqueen, you're not.

It's just that people don't talk about finances as openly as they might.

Premium bonds are good as they don't risk losing your money, and there's a chance that you could win money. They're offered by National Savings and Investments.

@BMWqueen

Hi I don’t understand anything else other than it’s just easier for me with a standard bank account sorry but im just thick shock if comes to the things mensioned above

That's fine. People on here can give you advice simply, that you'll understand.

Premium Bonds are really like a raffle. You buy bonds (tickets) and there's a draw every month and if your bond is drawn you can win some money. The prizes can be quite big. Lots of people say they win more money with bonds than they would get if they invested the same amount they spent on the bonds in a savings account of some kind.

You can buy premium bonds on line or at a post office. They never expire, but you can cash them in whenever you like.

www.nsandi.com/products/premium-bonds

Premium bonds used to give better returns than savings accounts. I don't believe they do any more but Money Saving Expert has several articles about them (www.moneysavingexpert.com/savings/premium-bonds/)

You can get child savings accounts with a much better rate than current interest as a general rule but stocks and shares do tend to do better. As long as you don't need to cash them out in a slump.

Personally I'd spread the risk so some in an ISA, some in a higher rate savings account (Halifax are normally the best) and some in premium bonds.

Thank you so much for your advice, I hadn't done much research and this info has been so useful, now I know what options there are

Have you looked at KidStart? They do a cash back account and now also have kids ISAs called Beansprout. I pay a certain amount a month and relatives can also contribute. Worth a look. Very simple as all done on an app.

@Stevienickknocks

Halifax do good children's accounts with much better interest rates than adults ones

Hi I know this thread is now old... wanted to ask if there are fees?

I've set up a junior ISA in DDs name wher I put a small amount each month and it will be hers when she's 18. Then I have an ISA in my name which I'm using to save for the big costs like uni or a house deposit. That will stay in my name so I can decide when/if to give it to her dependant on whether at that time she can be trusted with a big load of money.

I just had a catch up with my baby group friends this week. Our oldest dc are 18. There wasn't one person who had been paying into their CTF whose child hadn't spent the thousands of pounds their parents have saved for them on a load of old shite.

So my advice is, don't make it something that they get at 18 that you have no say in how the money is spent.

@FancySusan thank you. Very wise. I've spent my savings some of which was from my parents in my mid 20s on what I think now was loads of shit, so totally understand the point.
I want this saving account to be contribution from her dad and me though, and we both will be more willing to invest/save if that's in her name ...

@HalfShrunkMoreToGo

I've set up a junior ISA in DDs name wher I put a small amount each month and it will be hers when she's 18. Then I have an ISA in my name which I'm using to save for the big costs like uni or a house deposit. That will stay in my name so I can decide when/if to give it to her dependant on whether at that time she can be trusted with a big load of money.

Thank you, that's a great strategy