Children’s savings accounts i.e in a bank or building society
Minimum investment: Usually £1 but varies by provider and type of account. Rates of interest: Varies by provider and type of account. Regular (monthly) savings plans usually give a higher rate of interest than one-off deposits, and the same applies if the adult has a qualifying account with the same provider. Rates can also change at the end of the initial period. Tax implications: If gifts are from parents and any interest earned is greater than £100 per annum, there could be a tax implication for the parents. Ease of access (ie at what point can the child access their savings): Depends on the account. Some are available for children to access but often a parent or guardian is required. Restrictions: Often there are limits on regular savings or amounts to access best rates. How much can be saved into each one per year: No set limit, dependent on provider. Other things to bear in mind: The account usually needs to be opened and potentially operated by a parent or guardian, ie not the grandparent. Junior Cash ISAs (JISA) Minimum investment: Usually £1 but varies according to provider and account. Rates of interest: Usually higher than a bank or building society account – but they vary considerably.
Advice on savings plans for children continues to be a common request received by our financial planners. But where do you start if you’re a parent, grandparent, or family friend wanting to set up a regular investment plan for babies or young children? Adviser asked James Wright , Independent Financial Planner, to outline the pros and cons of the different savings plans currently available for children.
Tax implications: Free from Income Tax.
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