Children. Yes, they’re expensive. So, its natural you want the best for them and try to find the best way to save for their future. Whether you’ve recently had a baby or want to start a simple savings account for your child its never too late or too early to start. It’s quite a minefield out there with the number of adverts inviting you to start some sort of long term savings plan for your child, often these are bonds or require saving monthly for at least 15 years and then hoping investments mature…which they may or may not in today’s volatile and rather uncertain world of shares and investment plans. Therefore, my aim was to find a straightforward savings account for children with no ties; i.e. instant access, an attractive interest rate and the ultimate flexibility.
After some basic research, I found Alliance & Leicester’s ‘First Save’ instant access savings account for children came out tops in terms of interest rates earned (currently over 4 percent Gross) and flexibility in operation. There were also a couple of other banks and building society accounts that I considered such as Nationwide Building Society’s Smart 2 Save (currently 4.00% gross), some Halifax accounts
(though they required regular monthly payments) and Britannia Building Society. The only place I could find an interest rate higher than 4% apart from Alliance & Leicester was at some of the more rural Building societies. However, rural building societies often have their own built in clauses with the account meaning only local residents can open such accounts e.g. Saffron Building Society (currently 4.7% gross). Therefore, the best choice of account available to me was the Alliance & Leicester First Save account.
Opening the account (Child’s)
As the account is for people under 16 only, an adult is required to open it who acts like the trustee. Before actually going to open the account I enquired what was required (this being the first Children’s account I have opened) and was informed by an Alliance &Leicester [A&L] customer advisor just to bring one item from each List A &B as stated in their Application Form, this was to include identification for the child too such as a birth certificate. The next day fully loaded with my identification and the Child’s I went to open the account. I had filled in the application form already and bought 2 original documents of identification so I didn’t expect it to take long. Unfortunately, I arrived at A&L during a lunch hour (as that’s when I’m free) and was firstly told that a) that I would need an appointment to open the account (I was annoyed, especially as I’d visited a day earlier to check everything) and b) that 2 forms of identification would be required for me and baby. I know 2 forms are required when a single adult account is opened but the A&L Application Form was not clear at all –it implies that one should bring one item from each list –which is what I did. I had my driving licence with my address on, and loads of cards etc. I didn’t have my passport or Utility bill. I also had my child’s birth certificate. Anyway, later on I was told my identification would be ok as I’m sure they found me somewhere in the computer database.
So, could I open the account straightaway? No! Why? There were going to issue me with an appointment some 2 hours later. I didn’t have the time and also had stuck my car in a 30 min parking spot so had to tell them to forget it. I was very annoyed and later on in the week visited another smaller A & L branch (where there’s free car parking!) and opened the account with a minimum balance of £1 within a few minutes. I was issued with a passbook immediately. No goodies bag or toys for the Child, which was a bit disappointing, still I guess they have an attractive interest rate.
Ease of opening account: 2/5 (mainly due to negligence and unhelpfulness of busy city centre branch staff)
Ok, hard part over. I think its best to tell you the main features of the account. Firstly, its instant access and you can open the account with as little as £1. It pays one of the highest interest rates around, currently 4.3% gross. As it’s a child account it also means the interest earned is not liable to have tax deducted and you must make sure at the time of application you fill in an Inland Revenue form. Interest is paid once a year around 31 March. You don’t have to make regular monthly payments into it, you can save when and how you like. If you want regularity, you can set up standing orders to pay into the account. There is one thing though this account has a maximum limit of £25,000 so don’t start doing all your tax evading plans through this account guys! Seriously though that’s a lot of cash and the investment limit is very good compared to some children’s savings accounts that may have limits around £5000. With the higher investment limit it means you can really save for your childs future and hopefully as they grow older they can learn to save for themselves.
Features of account: 5/5
Other Issues:-
On day of opening the account, I deposited cash and cheques. I had also received gifts from family in USA and had a cheque in dollars to deposit. When I explained to the Advisor who opened my account I wanted to deposit it and enquired what the charges would be, he had no idea about international charges etc and just told me it’d be at least £15. This was a vague answer; I thought he’s supply me with a tariff sheet if he couldn’t remember such information but no, no help. I often find this lack of knowledge with many savings banks their staff are just not up to date with International bank transfers, foreign exchange etc. As a result, I did not deposit the US dollars cheque into the account.
To summarise;
The GOOD: One of the best interest rates around Flexible saving No notice Instant access
The BAD: Ease of opening account (due to Application Form and some Staff not being precise and clear), Staff not the most helpful, accommodating or knowledgeable in banking affairs or encouraging new customers (though, shouldn’t matter too much its just a simple Savings account –nothing too complicated!)
So, would I recommend Alliance & Leicester to you? As far as a Children’s Savings account is concerned, yes, I would, it really does offer the best savings rates in the country, and even when Bank of England lowered interest rates A&L kept the Children’s savings rate the same. Despite some initial opening problems and delays it still is a good rate and flexible account and its never too early or late to start saving for your Child.
Further details: -
This opinion relates only to Alliance & Leicester Children’s Savings Account (First Save) for further information see www.alliance-leicester.co.uk
How helpful would this review be to a person making a buying decision? Rating guidelines
Like the detail: A good review - the bit about needing ID is all part of the rules relating to Money Laundering prevention(Money Laundering basically means taking cash made from illegal sources; like drug smuggling, arms dealing etc etc, layering and integrating it back into society so it's untraceable). An attempt to foil all of those terrorists we hear so much about, so you can understand why it's done. All Banks and Building Society’s have to do it. You can't set up a Bank Account, or a Mortgage without first proving who you are, or at least the Bank/BS needs to prove that they have done all they can to confirm your identity and you’re not a naughty terrorist. The person behind the counter could be fined huge amounts of money and/or jailed for not checking or reporting you if they are suspicious. Which reminds me; I need to replace my false beard.
elkiedee 26.04.2004 12:30
I don't know if anyone's pointed this out but if your child's savings interest is more than £100 pa on money you have paid in, you will be taxed on it as if it's your income (I noticed this when you mentioned tax). Luci
Sep 8th, 2003
very helpful by (99%):
helpful by (1%):
