Halifax & Barclays are offering 3.5 percent interest rate on regular savings for children

Martin Lewis discusses UK regulated savings accounts

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From sporadic lump sums to regular deposits, there are various ways in which people will save their money. Budgeting and building up emergency savings are two key life tools parents and guardians will understandably want to teach the little ones in their life – as well as setting aside money for when they grow up.

That’s why many will set up a savings account for their child or children.

When it comes to children’s savings accounts, there is a number of options both in terms of bank and type of account.

For some, regular savings accounts, which allow deposits up to a certain amount each month, will be the right choice for their youngster.

Currently, Halifax and Barclays are offering the highest interest rate on this type of account, correct at the time of writing.

This is via the Kids’ Monthly Saver and the Children’s Regular Saver accounts, respectively.

However, the two banks have different rules when it comes to their own accounts.

Halifax says this account is “ideal” for an adult wanting to put money away for a child who is aged 15 or under.

To open the account, the person will need to be 18 or over and a UK resident, among other rules.

It will pay 3.5 percent gross/AER fixed, on balances of £1 or more, for 12 months from account opening.

The interest won’t change during this term, and it will be paid 12 months after the account is opened.

Via this account, the saver can pay in between £10 and £100 each month.

The amount can be changed at any time, and money doesn’t have to be paid in every month.

While the regular savings are set up by standing order, the bank also says it’s possible to top up the savings by bank transfer, as long as the £100 monthly limit isn’t exceeded.

With this account, money can only be taken out if the account is closed.

Barclays does allow withdrawals on the Children’s Regular Saver, but it can impact the interest rates.

For months with no withdrawals, the account pays 3.50 percent AER/3.45 percent gross per year.

It pays 1.51 percent AER/1.50 percent gross per year for months with withdrawals.

The interest is calculated daily using the statement balance and it is paid on the first working day of the month.

These rates are fixed, meaning they won’t change for the 12-month term.

With this account, minimum monthly deposits stand at £5, and they can’t exceed £100 per month.

To apply for the account, the person must:

  • Be at least 18 to save on a regular basis for the benefit of a child under 16. The parent, guardian or other adult operates the account as trustee for the child
  • Be resident in the UK
  • Have the account in their name only.

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