Baby’s first saving account

I would use a junior isa with someone like vanguard

I’m following as I literally went to nationwide today to try and open account for baby and was told they don’t do that anymore! So confused as to what I can do for him x

We use a vanguard junior stocks and shares isa. They can't touch it until they're 18 and it's invested in various things to help it grow. We've seen good returns.

Usually, can't withdraw from a junior isa, and they get access to the money when they turn 18. You can pay in a set amount each tax year (currently £9000 but it's set by the government so they can change it in April each year). This doesn't have to be in one lump some, you can pay in as much as you want when you want up to the limit. These accounts are good if you're a higher rate taxpayer and pay tax on your savings as they are tax-free. Bonds are usually fixed, so you pay in a lump some within a certain time frame and it's fixed until a set date (no access to the funds but also can't pay in any additional usually). Regular bank savings accounts will usually be accessible (not always if it's in the childs name), so have a lower interest rate, but if you think you might need the money again this would be the best option (just check the terms and conditions as it will vary between accounts). I hope that helps, but double check which ever one you open as what you can and can't do will vary.

@Ema can I ask you why please and how does it work? Is it in child’s name (under 1 year old) or adults name? Can you withdraw money or not? I want it to be in my child’s name. I’m not sure about not being able to withdraw until 18 as well. I had to grow up fast myself and start working at an early age. I’m a bit worried if my baby will need this money before 18, like if something happens to us, but also don’t want her to be reckless with it before she is old enough to understand, again if something happens to us and we cannot fully explain it to her.

If you think you may need access to it before 18, I would recommend avoiding an ISA as these are very difficult to get the money back out of and will only be considered in extreme circumstances.

@Chloe thank you, I’m thinking on doing both maybe isa and regular bank account (for her to access in emergency)

Yeah, that's probably the best idea! If you can withdraw the funds from the regular bank account, you could always move some across to the ISA if you wanted to. That's what we're doing for our LO. Some banks offer children's accounts attached to your account, too, so the account is in their name, but you have full control over it.

It’s an investment account and I have so far been able to get great returns. I plan on teaching my children about investing and it’s also great that they cannot access it till they are 18. There is also an app that you can control the acct from.

We use NS&I premium bonds for our daughter. Every month here is a draw and you might be a lucky winner of some money that you can put straight back in to reinvest. We set one up for her because all of us have a premium bonds account so it made sense to us. Only thing is it can take up to 5 days to withdraw the money. You can choose to set up for a child/someone else x

If you're worried about something happening and her not having money make sure you have good life insurance as the first port of call, that should be a much bigger pay out than a savings account unless you're particularly wealthy 😊 We do a stocks and shares investment thing, I have to admit my husband did the research on that but she's made money already 😂 my dad wants to set up an account but tbh the ISAs where they can access at 18, while good, wouldn't necessarily be my top choice. My nan did one of those for me, there was 3k in there and I pissed it away at uni. If I had been more mature when I got the money it could have made such a difference. Something to consider is whether you save it with a purpose in mind rather than an age e.g higher education support, first rental, help with furniture, first house, help with deposit etc. Then when your baby is older you can discuss in what way they think the money would be best spent.

We just have a regular savings account, and every year I shop around for the best interest rates and deals and move it around accordingly. I didn’t like an ISA as what if he wants to buy a car or whatever before he’s 18, same with bonds etc. We used it ourselves as emergency cash earlier this year - sounds awful but we were buying a new car and hadn’t quite sold our old one so had a cashflow issue. Borrowed it from his account and paid it straight back a week later. I felt guilty at the time, but it’s not like I spent it lol. And couldn’t have done that with an ISA or bonds.