Savings account for kids

[jona]

We were given some money for Christmas from relatives for the kids and want to set up a savings account for them. Can anyone tell me the best one to choose? Every bank/building Soc I've approached has tried to coax me into setting up a savings scheme for them, which we don't want to do. Just a plain old savings account please.

My kids have got Nationwide accounts and I'm very pleased with them so far. The only thing which puts me off slightly is that age 7 the accounts have to be transferred into the child's name. I really want them to have a nice nest egg for when they're 18 or 21 - towards a car or a mortgage or that sort of thing. And I can't see that happening if they have access through the teenage years!

We have the Nationwide "Smart 2 Save" account for DS, which seems to be one of the most highly rated for a combination of high interest rates, and access to the money if it is ever required.

Jona

I have set up a childrens account with the Alliance & Leicester for my DD, they were totally non-pushy about it and very helpful in explaining what the options were.

I also started her off a pension as a great way of saving money for the future that they can't raid when you hand it over to them.

We opened a Britannia First Save account for dd. It's in my name for a child so child benefit can be paid in, and it is also tax free.

We went with the Abbey National and you get a free welcome pack for the kids with them.

It's not specifically recommending savings accounts, but this article , from the Motley Fool, is quite interesting regarding investing for children (especially the bits about the friendly society bonds that seem to be pushed so much).

There's an up to date table comparing rates on children's accounts here which might give you a good starting point when it comes to choosing.

Anais - apparently the Bath and Harpenden building societies both have acocunts which prevent any money withdrawals until the child reaches 18.

My Ds's account is with the Halifax, purely because it is the only Building Society locally & I wanted him to get used to going in & putting his money away - he's nearly 2 but already shouts out 'money' to all & sundry whenever we go in! Halifax do seem quite good, they recently advised me to close his original account & open a new one as the rate of interest was better - also got another pack of 'freebie gifts'.

anais we were advised to open an isa in our name for ds when older so we can use the money for him or hand over when old enough, the bank a/c which will transfer to his name when 7 is just for his piggy bank money so doesn't matter if he raids it.

Obviously the ISA route is only an option if you aren't already using your allowances.

And there are a few other caveats - basically the situation can become a bit more complex in the event of family breakup, death or bankruptcy, when there may be no guarantees that the child actually gets the money. I know we all think it won't happen to us, but it's maybe as well to be aware of it.

Say you set up an ISA in the name of one of the parents....

...that parent becomes bankrupt, "his" (or "her" ) ISA is available to their creditors.

...that parent dies, "his" (or "her" ) ISA is part of the estate for Inheritance Tax purposes

... the marriage breaks up and one parent leaves, taking "his" (or "her" ) ISA with them...

We are probably going to be opening a tracker fund (which I think is an ISA). My DH has been doing all the research and has been using the Motley Fool website GillW mentions. It is very good for any financial products. I think the tracker we are considering at the moment is with Legal and General.

We also thought about opening a pension but had some doubts - DD will have to wait an awfully long time before she can use the money and who knows what decisions the government will take on pension products between now and when our children retire.

My parents have also opened a Nationwide account 'Smart 2 Save' for our DD, so they can add money to the account when they can. It seems to be one of the best accounts on the market at the moment.

Greengage Hope your tracker does better than mine. I have lost quite a lot of money with mine and my mum lost with hers too.
Jona we have set up a Nationwide account (smart 2 save) for dd, it does well in all the league table thingys.

Haven't read the whole thread- but has any-one mentioned premium bonds. You can buy small amounts(I think £25) for kids, as the adults minimum is £100.

I think the minimum amount on premium bonds is £100 at a time now, regardless of age.

Gillw - you're right ..£100 for premium bons, what I was thinking of was Children's Bonus Bonds come in £25 you don't get any prizes but a decent rate of interest. Right going to try a link now... national savings