A cheque or cash slipped into a birthday card is usually a welcome gift from a grandparent. But there are ways to save and invest for grandchildren that can have a more lasting effect on their financial independence. We outline the options.
Child savings accounts
There should be no obstacles for a grandparent who wants to open a children’s savings account for their grandchild, as long as they open the account in the child’s name and have documentation, such as the child’s birth certificate. As long as a child earns less than the personal allowance, currently £9,440, a grandparent can fill out an R85 form to ensure any interest is paid without tax being deducted automatically.
An advantage for grandparents is that no amount of interest earned on money they put in is subject to tax, while only the first £100 of interest earned on money given by a parent is tax-free.
The best rate on a children’s saving account is 6pc from Halifax, although this rate is only fixed for the first year and the maximum deposit is £100 a month. Skipton Building Society has a five-year fixed-rate bond paying 3pc a year, while a new children’s saving account from Nationwide, Smart Limited Access, also pays 3pc a year with one withdrawal allowed each year without affecting the rate.
http://www.telegraph.co.uk/finance/p...dchildren.html
Child savings accounts
There should be no obstacles for a grandparent who wants to open a children’s savings account for their grandchild, as long as they open the account in the child’s name and have documentation, such as the child’s birth certificate. As long as a child earns less than the personal allowance, currently £9,440, a grandparent can fill out an R85 form to ensure any interest is paid without tax being deducted automatically.
An advantage for grandparents is that no amount of interest earned on money they put in is subject to tax, while only the first £100 of interest earned on money given by a parent is tax-free.
The best rate on a children’s saving account is 6pc from Halifax, although this rate is only fixed for the first year and the maximum deposit is £100 a month. Skipton Building Society has a five-year fixed-rate bond paying 3pc a year, while a new children’s saving account from Nationwide, Smart Limited Access, also pays 3pc a year with one withdrawal allowed each year without affecting the rate.
http://www.telegraph.co.uk/finance/p...dchildren.html
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