Compare Children's Savings Ideas
Why we like it: Can be opened by or on behalf of any child up to the age of 18. Debit or cash card available for those aged between 13 and 18. Monthly interest. No monthly fee. For children under age 13, the account must be opened in trust and managed by an adult (trustee). If you’re aged between 13 and 18 years old and live permanently in the UK you can apply online by telephone or in branch. No overdraft facility. 1% interest on the entire balance once the balance is £100, 2.00% AER/1.98% gross (variable) on the entire balance once the balance is £1,500, 3.00% AER/2.96% gross (variable) on the entire balance once the balance is £1,500 or over (up to a maximum of £2,000)
Why we like it: Invest tax-free from £10 a month or a £50 lump sum — or a mix of both.You can raise, lower, stop and restart your payments any time you like. A selection of eight funds to choose from, so you can tailor your child's investment
Disclaimer: The value of your investments can fall as well as rise, so your child could get back less than you paid in.
Why we like it: Shepherds Junior ISA lets you save regularly to offer your child a head start in life. You can save up to £4128 a year TAX-EFFICIENTLY if your child is aged under 18 and does not already have a Child Trust Fund in their name. You can invest from just £10 a month and can pay in lump sums from a minimum of £100 initially and £10 at a time thereafter. Apply for a Shepherds Friendly plan online and get a Love2Shop voucher code worth up to £50* once you’ve made your first payment into the plan
Disclaimer: Stocks and Shares Junior ISAs offer the potential for higher returns than Cash Junior ISAs, particularly if you choose to invest for the long-term. However, you do need to know that, as the underlying value of your child’s investment is linked to the fluctuations of the stock market; although the value cannot fall there is no guarantee that bonuses will be added each year.
Why we like it: Investing for the child offers the potential for higher returns over the long-term on their money than would be available by saving in most cash savings accounts, however there are no guarantees with regards to the size of the bonus that will be paid each year.
Disclaimer: Investment growth is by means of bonuses, the amount of which cannot be guaranteed throughout the term of the contract.
Why we like it: The Shephereds Junior Money Maker Plan is a tax-efficient investment plan for children which aims to provide the child with a tax-free lump sum that they can use to help them towards the cost of paying for university, or to assist with any other goals they may have, such as buying a home or starting a career. The plan is designed to help you save enough over the long-term to cover the majority, if not all of the child’s fees when they start higher education, and offers a unique withdrawal process that allows them to take the money gradually throughout their university career. Apply for a Shepherds Friendly plan online and get a Love2Shop voucher code worth up to £50* once you’ve made your first payment into the plan
Disclaimer: Investing for the child offers a greater potential for growth over the long-term than is typically available in a cash-based savings account, but you should consider that, unlike cash accounts that tend to have a set interest rate, the size of each annual bonus is not guaranteed.
Savings For Children
1. Children's Savings Accounts
- Most banks and building societies offer children's savings accounts. The problem is that many of them pay very low rates of interest. If you want security but are not too concerned about growing capital, then there are no shortage of options. However, with many accounts paying less than inflation, in real terms your child's nest egg will lose value in real terms.
- Savings accounts for children provide a good way for children to learn how to manage money and help them get into the savings habit. Additional incentives from providers might include gifts with the account such as piggy-banks or calculators.
2. Children's ISAs or Junior ISAs
A child qualifies for a Children's ISA, or Junior ISA as they are often called, if they are under 18 and live in the UK. If you want to open a Junior ISA for your child, most ISA providers will give you this option. However, it is important to note that under current HMRC rules, you cannot have a Junior ISA and a Child Trust Fund.
- Junior Cash ISA - Junior Cash ISAs work in a similar way to savings accounts. The exception being that the interest is tax free and your child cannot access the money until he or she is aged 18.
- Junior Stocks and Shares ISA - With a Junior Stocks and shares ISA you can invest in shares, bonds and other eligible investments on behalf of your child. The value of these investments can go down as well as up.