Matt21
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| posted on 4/12/16 at 12:58 PM |
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Childs Savings
Me and the wife have just had our first child and I would like to start putting some money away for when they're older.
I've looked at savings bank accounts, they offer 'good' rates for the first year, then you need to change the account etc
Child ISAs, which I'd like to avoid as when they turn 18 we have no control over how the money gets spent (if he turns into a drug abusing
tearawat then he can use the money to buy god knows what)
So can anyone suggest anything else or any bank accounts to save money?
Ideally I would like it to be pretty secure, but don't mind a reasonable risk investing.
It's also a monthly thing, not an upfront lump sum.
(Ignore this next paragraph  )
If I managed £100 a month for 18yrs and somehow managed to keep interest rates at 4%, It would only make ~£850 over the whole duration (which I
don't see as being too great)
Any suggestions?
[Edited on 6/12/16 by Matt21]
Instagram: @matt211988
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Slimy38
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| posted on 4/12/16 at 01:11 PM |
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We're just using a Tesco savings account for now, it's still outperforming a fair few 'investments'.
Your maths is slightly off though. Use this;
http://www.thisismoney.co.uk/money/saving/article-1633419/Monthly-lump-sum-savings-calculator.html
You'll see that even at 4% you'll still have 10k extra by the end.
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coozer
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| posted on 4/12/16 at 01:53 PM |
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Buy some gold, save your monthly money then buy some bullion, coins or bars and by the time the bairn breaks 18 you'll all be minted!
For me its the only way until the savings rate pick up!!!
1972 V8 Jago
1980 Z750
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snapper
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| posted on 4/12/16 at 02:02 PM |
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Children's bonds over a fixed period
I started with utility shares my dad passed to me and my sister for our children, as the dividend rolled in they were invested in a savings account,
when utilities were taken over any buyout was put in savings, when the savings were large enough to invest I bought children's high interest
bonds. Generous Xmas and birthday cash was used to buy phones and other treats leftover money reinvested. When my daughter reached 18 I opened a joint
account but only I have the access codes, if I kick the bucket she had full rights to go into the bank and drawdown the funds.
There is a bit of trust needed by works for us
I eat to survive
I drink to forget
I breath to pi55 my ex wife off (and now my ex partner)
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cliftyhanger
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| posted on 4/12/16 at 02:14 PM |
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The tricky bit is if you want control of your childs money, especially after 18. It may need a trust or suchlike. Do your research well!
Also, less of an issue now, but parents can only put a limited amount in without tax implications. Too many people transferring money into kids
accounts etc to avoid tax.
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mark chandler
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| posted on 4/12/16 at 05:30 PM |
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You cannot provide a gift then take it away as once given its gone.
All you can do is be grumpy after the event, 18 year old children are not fully cooked at 53 I,m struggling to grow up and spend my money on the wrong
things!
If your savings put them through a good education that is money well spent.
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steve m
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| posted on 4/12/16 at 05:59 PM |
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Buy the kids premium bonds, saving schemes are all crap
I have 13k of bonds, bought in September, and two months running got £25,were as my mother has 10k in bonds, and this year already won £225,
That far outweighs the best interest you will find in this country, and with the possibility of a big win
steve
Thats was probably spelt wrong, or had some grammer, that the "grammer police have to have a moan at
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ste
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| posted on 4/12/16 at 07:25 PM |
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I have a childs isa for my daughter set up through Hargeaves Lansdown ( www.hl.co.uk )
She also has a pension through them, she had 30% growth in the two years it's been with her money which is invested in Nepute UK midcap unit
trust.
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ste
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| posted on 4/12/16 at 07:26 PM |
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http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/n/neptune-uk-mid-cap-class-c-accumulation/charts
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nick205
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| posted on 5/12/16 at 09:25 AM |
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An interesting question.
I have 3 kids at, 1 @ 10 and twins @ 8.
Currently we have Child Trust Funds running for all 3 of them. However I am considering options for moving the investments elsewhere. I feel there
must be better options available even if a little more work is involved on my part.
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Chris_Xtreme
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| posted on 5/12/16 at 10:18 AM |
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I've got 2 kids and have just gone for premium bonds. considered nsand children's bonds at 2.5% and then decided that the gamble on the
unlikely big win on premium bonds was more worth it.
what I found with the banks accounts was that you may get 4% in an account for 1 year, max(not much) amount a month which would get you about x tiny
amount of interest, then the interest rate drops to pretty much nothing. You can't move that money to another account at 4%, all you can do is
start again. And you can't save much each month in these 4% accounts. I'm sure It was 20 - 30 quid interest even at 4%.
I too want to be able to spend the money on them before they are 18, say on school trips etc so isas are not right for me.
Depending on how much your mortgage is and if you have it as an offset you could just keep it in the offset savings account and save you the interest
on your mortgage and make some money that way.
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russbost
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| posted on 5/12/16 at 10:38 AM |
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I would suggest putting half of it (spreads risk) into funding circle, I have been getting around 6 - 7% on money with them for the past 18 months or
so. There is a risk element, but that figure is after bad debts are taken into account, it comes recommended by Martin Lewis of Money Saving Expert,
he's had money with them for about 3 years I believe
I have a substantial chunk of money in Premium Bonds, but very rarely get a payout, they cut their rates same as everyone else did, I believe their
payout rate is less than 2%
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nick205
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| posted on 5/12/16 at 10:45 AM |
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^^^
I've had a look at current accounts paying up to 5% interest. They all seem to require a certain amount of money paid in per month though.
SWMBO and I have even considered using such accounts and having salaries paid in then move the money elsewhere. Not considered Premium Bonds, but it
could be a good option long term for them (and maybe for us too).
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Matt21
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| posted on 5/12/16 at 02:43 PM |
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There is a site which tells you the odds of winning with premium bonds. For the amount I'd have in there I'd pretty much stand no chance
of gaining anything for most of the duration. So I won't bother with them.
My maths was way off!
I think I may look at splitting the amount as mentioned.
Put half in a savings account and just switch it around to get the best deal when the time comes, and stick the other half into some form of childrens
investment program with the likes of HL.
Does that sound like a wise move?
'Guarenteed savings' and an extra boost if the investments pay off?
Instagram: @matt211988
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My YouTube
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gingerprince
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| posted on 5/12/16 at 05:16 PM |
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quote:
Originally posted by Matt21
If I managed £100 a month for 18yrs and somehow managed to keep interest rates at 4%, It would only make ~£850 over the whole duration (which I
don't see as being too great)
That's not right. With no interest you'd put in 12*18*100=£21,600. Compounded at 4% over the same period would give you £31,334.70 so
nearly 10K, not £850, which is just 4% of your investment.
If you want to see how it works, do a quick spreadsheet: -
Put 100 in A1
Put =(A1*POWER(1.04,1/12))+100 in A2
Drag A2 down to 216
POWER(1.04,1/12) gives you the 12th root of 1.04 (base + 4%), i.e. the monthly interest (assuming an account that pays monthly).
[Edited on 5/12/16 by gingerprince]
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