Monday, 9 September 2019

Where should I put savings for my children?


Savings? Ha! Our own cash might mainly be taken up by mortgages, rent, Asos orders and food shopping, but sometimes you might have a bit that you'd like to snaffle away for the Kids' Future. Maybe grandparents or other relatives want to give money instead of yet more plastic crap toys for a birthday. But where to put it? 

If you go into your local high street bank (if you can find one, that is) the rates are likely to be thinner than a discount supermarket's nappy wipe. For some reason, some institutions think that adding a cartoon pig and a kids' label to a bank account means they can get away with almost-zero interest. So here are the best options around - because children are never too young to know the benefits of having money in the bank to pay for a rainy day! 

IF... you want to put a regular sum into a savings account 

Then go for a children's regular saver like Halifax's Kids' Monthly Saver. It pays interest of 4.5%, fixed for a year with up to £100 allowed to be paid in each month - but you can't withdraw any cash during that time (yup, even for that LOL doll they're really desperate for - a great money-saving lesson!) The bank will automatically also open its easy-access Kids' Saver account, paying 2% interest, and transfer the Monthly Saver cash over to that account at the end of 12 months. 

Another option: Saffron Building Society's children's regular saver pays 4%, fixed for a year and you can save up to £100/mth. It allows withdrawals, but the big downside is it's not an online account - you'll either have to go into the branches (here's a list) or post cheques.. And after the year ends, the account rolls over to paying a paltry 0.25% interest, so set a reminder to move that cash. 

IF... you want an easy-access children's saver 

You'll want to consider Nationwide's Future Saver (for under 15s) which pays up to 3% on £5,000 a year, if parents have a main Nationwide current account, or 2.5% otherwise. That interest rate is subject to just one withdrawal per 12 months – if you make more, you're penalised with a 0.5% interest rate for the rest of the year. 

Or think about HSBC's MySavings account, which pays a 3% interest on up to £3,000 – with unlimited withdrawals. 

IF you want a fixed-rate kids' saving accounts 

These - or a JISA -are ideal if you want to save money for your children's future, rather than have somewhere for them to dip in and out of. Generally, the longer the cash is locked away for, the better the rate - but you'd lose out if the Bank of England puts up interest rates. Currently, Cambridge Building Society has a three-year fixed-rate kids' account (they call it a bond, but it's just a savings account) pays 2% on pots between £1,000 and £20,000 (but you can only deposit the cash once, and can't add to it), and again it's a branch access or post job. 

* All rates correct at time of writing, please check terms, conditions and details before opening any new accounts or moving your money.
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