What baby savings schemes would u recommend?????

[SANA]

Hello Mners

Have just started into looking at baby saving schemes to put d when old enough through uni etc. I have lookED at baby bonds but it all seems so confusing what r other mners doing???

We've got something through the Scottish Friendly Society.

i looked at loads of savings schemes but have decided to just open an ordinary bank account and put ds's child benefit in each month. spent the first months CB before i had a chance to save it so now i have set up a standing order direct into beans account. a lot of the schemes i looked at only let you save a certain amount a month, £25 rings a bell for some reason, this way bean is guaranteed £66pm and i can put extra in if i have any spare.

I'd suggest you have a look at the Motley Fool website (www.fool.co.uk) - there are loads of discussion boards on there specifically dealing with investing for children. I think the general consensus is to steer clear of products specifically marketed as children's bonds/accounts etc. I think Baby bonds and/or friendly society policies are pooh-poohed by the site as yielding no more in the long run than a normal high interest savings account. They are just endowment policies after all with high charges.

SANA I'd second Roobie about the fool website. Especially details of taxation on children's accounts. Any interest earned on money you put in (and that includes child benefit) is taxed as if it is your money, rather than your child's. Money from grandparents/others is not. You need to look at the details.

I second Roobie's advice, and the Motley Fool website is FULL of useful articles and helpful discussion boards. Go there.

In general, baby bonds with friendly societies are tax free, BUT they are high charging endowment policies and you can only put a limited amount in and can only get it out at a certain age. So the tax-free benefits are outweighed by the charges.

In general, it is better to save the money in a 'general' account (cash ISA or stocks and shares ISA often being a good starting point, depending on amount saved), and just 'think' of it as being for your DDs Uni or whatever.

thanks, will have a look at this website tomorrow, didnt realise that for the bonds there are admin charges!!

If you open a savings account in your child's name ask to sign an IR81 or 85 (can't remember the exact number.) This means the interest isn't taxed until it goes over the allowance level. True about you putting money in though - you can put so much without being taxed, but there is a limit.

National Savings and Investments ("from the post office")is tax free regardless of how many other (child) savings you have but you can only by £1000 per issue (few issues a year).There was another thread about this a while ago,that is from where I got the information..
I suppose there are better ways to get more money but if you are as useless as I am it is better than having your money in a current account.

SANA - (if I understand correctly) with the children's bonds, the charges aren't always obvious, as they come out of the money they make on your investment before they give it to you, rather than off your account.

Any investment based on shares or similar will have some form of charges to pay for the people who manage the investment. How much varies enormously.

Motley Fool also do a book called "how to make your child a millionaire" which has some good ideas in it, and exposes the hype of the "Baby Bonds" for what it is - endowments (and who'd buy one of those these days?).