Halifax launches new market-leading savings account for kids with 4.5% interest
HALIFAX'S new kids monthly saver is offering one of the very best rates available for a children's bank account.
With a 4.5 per cent interest rate this account will let you save for your children's future, while teaching them about the value of saving.
Depositing £50 a month for a year into your child's account with Halifax's new kid's monthly saver account earns you £14.63 in interest.
Halifax's new kid's saver and kid's monthly saver accounts could give you a helping hand in saving money for your child's future.
After years of low interest rates, these accounts might be sign that things are looking up for savers.
The two new accounts are available online, in branch or by phone.
The next best offer is who offer a children's regular saver with a 4 per cent interest rate.
This account is nearly identical to Halifax's new account expect it allows for unlimited withdrawals.
offers 2.75 per cent AER as well as allowing your child to save up to the age of 17.
but the child does have to be seven years old to open the bank account so you can onyl save for ten years.
have a junior savers that gives your child 2.50 per cent AER on their savings.
To get that full interest rate you have to wait, the account starts off with a 1.25 per cent rate and then an extra 1.25 percent bonus is added onto the account forever after the child's first birthday after starting the account.
To get an account your child has to be under 15 and you can only have a maximum of two accounts per child.
The best rate comes with the kid's monthly saver account which has 4.5 per cent interest, allows parents to deposit between £10 and £100 a month.
After this 12 month period the kid's monthly saver is automatically switched onto the kid's saver account which has 2 percent interest and unlimited withdrawals.
The interest rates on these accounts is an AER which just means annual equivalent rate of savings and it shows you what percent of interest you'd get over a year if you put money in the account and left it there.
Whereas APR is more often used for interest rates on borrowing money and also includes any bank charges that come with the account as well as the interest rate.
Tom Adams, head of research at savings advice site, Savingschampion.co.uk said “The kids’ monthly saver is offering one of the very best rates available for a child’s savings and is the ideal place for parents to put regular amounts aside each month for their child’s future.
";A whole 0.50 per cent ahead of the nearest competitor, Halifax is the clear choice for those looking for this type of account, although it is worth noting that after the first 12 months, funds are moved to the kids’ saver account, so an alternative may need to be considered at the time."
It's not the only way you can save for your child's future.
By saving into a pension from the time your child is born you could make your child a millionaire by the time they are 64 with just £60 a week.
So are interest rates getting better in 2018?
THESE much higher interest rates are a good sign that customers might be able to make some serious gains on their savings again soon.
The government has now stopped two schemes that gave money to banks to then help out small businesses.
As these schemes have stopped the banks can no longer rely on free money from the government so they will be looking to savers again to make money.
To entice savers back they will likely offer much better interest rates than have been seen in recent years.
Saving rates are still rough for the moment with Santader offering as little as 0.25 on their Esaver ISA while the equivalent ISA from 2012 was paying out 3.3 per cent.
But, interest rates like this on a kids account is a good sign of hope for savers in the near future.
Giles Martin, Head of Halifax savings, said: “Feedback from parents showed that they wanted to be able to open a savings account for their children quickly and easily, with competitive rates, but they also wanted the flexibility and peace of mind of managing it online."
“Opening a savings account is a great opportunity for parents to help their kids understand about money, and to get them into the savings habit from an early age.”
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