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Saffron’s Ladybird Club |
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Some of them may look cute but they are all horribly expensive. Madeline Thomas, a former Reuters money reporter and leading UK personal finance journalist, on five of the very best savings schemes for kids. Click to view Top 5 Kids Savings Schemes.
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Best High Interest (B&B's FirstSave) |
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| If the piggy bank is threatening to burst and your child is more interested in amassing cash than spending it, then set up a high interest saving account. Bradford & Bingley's Firstsave account is a great option for children wishing to tuck money aside. |
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| This account pays 5.55% gross and you can amass up to £25,000 in it. This is not the highest rate of interest on offer for a child’s account – the Halifax Children’s Regular Saver, for example, offers 10%, but it must be opened and operated by an adult trustee. The Firstsave account is open to children under 13, and aims to train children in how to grow their savings from a young age – only those under seven must have an adult as a trustee. Those aged between 13 and 25 qualify for a "Smartsave" account, which pays the same rate of interest. |
Pocket Money |
Although your child needs £10 to open an account, thereafter payments of any amount can be made at any time, making it ideal for children.
“It really is for everyone,” said Anna Bowes, savings & investment specialist with Chase de Vere, the financial advisers.
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Instant Access |
B&B's Firstsave account also gives savers instant access to their money, just in case they decide to raid the piggy bank after all.
However, although the account can hold up to £25,000, the £100 rule applies to the amount of interest. That is, children can earn up to £100 interest in any one year from money specifically given by each parent before it is taxed. Earn more, and the whole lot of interest is taxed at the respective parent’s tax rate. Money from grandparents, godparents and other family and friends can earn interest tax-free.
The account can be accessed through the internet, by telephone, by post or through the Saffron Building Society’s branches if you are in London or the southeast of England – it is a mutual society based in Saffron Walden, Essex. The account can be operated at a distance by post.
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Pros
Good rate
Instant access
Starts them young
Cons
The “£100 rule” applies
Account can only be accessed through the branch network
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Other great reviews in Money:
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