NS&I Chil­dren’s Bonds to close next month

The Daily Telegraph - Your Money - - YOUR MONEY - Amelia Mur­ray

Na­tional Sav­ings & In­vest­ments will close its pop­u­lar Chil­dren’s Bonds next month af­ter introducing its new Ju­nior Isa.

NS&I con­firmed that the 800,000 bonds opened by par­ents, grand­par­ents and great-grand­par­ents could be kept un­til ma­tu­rity, but did not say what would hap­pen to the ac­counts af­ter that. It said it would write to cus­tomers to ex­plain their op­tions.

A spokesman said Chil­dren’s Bonds would no longer be avail­able from Septem­ber 2017, al­though the ex­act date has yet to be set. More than £500m is cur­rently held in the bonds, which are for chil­dren un­der 16 and pay 2pc an­nual in­ter­est for five years. The max­i­mum that can be saved is £3,000 per child for each is­sue of the bond (the cur­rent is­sue is 36).

The in­ter­est is tax-free so does not count to­wards the adult ac­count holder’s per­sonal sav­ings al­lowance. When the child turns 16, they can look af­ter the bond them­selves.

NS&I last week launched a Ju­nior Isa, which also pays 2pc tax-free. Par­ents or le­gal guardians can open the ac­count but any­one can con­trib­ute as long as the to­tal doesn’t breach the 2017-18 Ju­nior Isa al­lowance of £4,128.

How­ever, as sav­ings op­tions for chil­dren go, it’s far from com­pet­i­tive. The top Jisa, from Coven­try Build­ing So­ci­ety, pays 3.25pc. Par­ents who pay in their child’s full al­lowance would earn £134 a year in in­ter­est from Coven­try; NS&I would pay £83.

Na­tion­wide, Halifax, TSB, Tesco Bank and Dar­ling­ton Build­ing So­ci­ety all of­fer Jisas with a 3pc rate. These ac­counts would pay £124 in a year.

There are also a num­ber of non-Jisa sav­ings ac­counts for chil­dren that may be bet­ter suited to those with smaller sums. Saf­fron Build­ing So­ci­ety and Halifax have reg­u­lar saver ac­counts for chil­dren that pay 4pc. Up to £100 a month can be de­posited in the ac­counts for a year. San­tander’s Mini 123 cur­rent ac­count pays 3pc on bal­ances be­tween £200 and £2,000.

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