Savings account for children's allowence

iMax

Hi there,

Hopefully someone can help me out with this question. We have a three year old with a not inconsiderable sum in savings, (we've been in the very lucky position that we haven't had to touch her children's allowance) & we're hoping to use it as a college fund in the future.

It's currently in an AIB savings account earning almost nothing. Obviously this is not satisfactory & we've been somewhat lackadaisical about getting this sorted out.

Where is the best option for us ? She gets approx €150 a month in C.A. there's an additional €250 per quarter in special allowance up to age 6 & we also put in any cash gifts she gets. In addition I have a standing order for a small amount of "pocket money" that goes in each month.

Is there a better option In AIB or should we look elsewhere ? Rabo have 4.3% is that good ?

The account that we choose would have to be "fed" from her savings account as it's too much hassle with the government to change.

Thanks in advance

MarkR

I do the same thing for my wee man, use Rabbo as well.

iMax

How do you find it Mark ? Is it the best around (for now)? Would I be better with a repeating term deposit account or just straight savings ?

SuperHans

First active offer a 5.1% annual effective rate for their e-savings account. It is solely an online account though, but getting money in and out of it is easy enough. I just sent them in the relevant documentation and they got back to me within a week or two, after I had applied online. Then it was just a case of setting up the parameters on my BOI account to transfer money to and from the first active account.
They also give the interest on a daily basis which is a plus.

The interest rate is floating though, so it's liable to change, but the fact that you are paid the interest daily means you can withdraw your funds and go somewhere else if their rate drops too low.

stepbar

Put it in a monthly savers account - most institutions offer up and above 7%. Put the rest in a deposit account, most banks have an account geared for young people - AIB - http://www.aib.ie/servlet/ContentServer?pagename=ROIPersonalPortal/AIBParent_P/pp_service_line&c=AIBParent_P&cid=1136826239588&channel=P003

BOI -http://www.bankofireland.ie/html/gws/students/primary/account_for_you/index.html

parsi

iMax wrote: »

The account that we choose would have to be "fed" from her savings account as it's too much hassle with the government to change.

Maybe you have a special circumstance but changing accounts for children's allowance is no problem at all. We changed ours last year and it was very quick. The main thing is to make sure you don't close the old account until you see the first payment in the new one.

Whatever account you choose keep an eye on the max monthly deposit. We've 3 kids and the total CA would have been over the max deposit for a number of the more attractive accounts.

Oracle

I think everyone's forgetting the new kid on the block the Halifax Child Saver account. It pays a very generous 7.25%, and it's specifically designed for saving for children. How the account works is a bit complex but put simply you deposit up to €200 per month every month, on that you earn 7.25%. Then after 12 months the total amount saved is swept into what they call an Acorn account, on that you earn 3%, not market leading but not bad either. Then the whole thing starts again and you continue to save €200 per month, earning 7.25%, after 12 months it gets swept into the Acorn account again, and so on....

To avoid your accumulated money only earning 3%, you can withdraw it from the Acorn account and deposit it elsewhere (i.e. transfer it to an account earning more than 3% interest.) But your €200 per month regular saving continues to earn 7.25% interest.

You could set up a direct debit to feed from the AIB account to the Halifax Child Saver account. A better option would be to set up a Halifax Flexi Saver account at the same time and transfer all her savings in there (5.15% on up to €10,000) Then get the Child Saver account to feed from this account, so you'd be getting 5.15% on the lump sum, and 7.25% on the regular monthly withdrawals.

Update: Sorry, my mistake, looks like you can't have any direct debits coming from a Flexi Saver account, so maybe another high interest account allowing direct debits would work (i.e. FirstActive E-Savings ??). Also AIB themselves have just introduced a Regular Savings Account paying 7.3%, so that might be worth looking at.

Fmac

Hey there
Just thinking of opening savings accounts for 2 kids. Anyone got good info about the best options since banking has changed so much in last year? Obviously looking for something with high interest, around 100 a month, over a long enough period. Ideally I'd love to be able to add a bit in every now and again for birthdays etc. <snip> Any suggestions?

bladespin

Hi, just looking for some advice about savings accounts for children. Our little boy made his christening a few weeks ago and received some gifts in the form of cash, I would like to put this away for him to use when he's eighteen or twenty-one, it's not a big lump sum (€500), but I'd like to add to it over the years as well, any ideas???