Help Desk

Make your child saving 'tax-free'

Most banks and building societies offer children savings accounts and finding the best deals is an easy process once you understand the basics.  

First, before opening a children savings account, fill out the Inland Revenue R85.  This will allow your child savings to be tax-free. If you don’t complete this form, your children could be losing thousands of pounds to the Inland Revenue. 

Second, banks and building societies often offer much higher rates of interest for their children's accounts than their traditional savings accounts. This is because trends indicate that once they have your children hooked onto an account, it is highly likely it will remain open for life.

Find the Best Deals

Therefore, banks and building societies will entice you with short-term higher rates, bonus rates, free debit cards for children, money-boxes, height charts, colourful stickers or whatever it takes to get you to join their savings account.

However, you should be mainly concerned with interest rates when looking for the best deals for your children savings account.  Forget the multitude of freebies banks are offering and look at the long term. A complementary piggy bank worth £3 is insignificant compared to the hundreds (and hopefully) thousands of pounds you will save for your children's future.

Lastly, don't be loyal to banks because they are certainly not loyal to you. Constantly look out for the best deals on the market. A best buy deal today does not mean a best buy deal tomorrow. 

Choosing the right bank account will depend on how much flexibility you want. Bank accounts come in two categories: Instant Access and Fixed Rate Bonds.