Axe falls on best deals for children

BANKS and building societies, ever keen to cut rates they pay to savers, have turned their attention to children’s accounts.

The rate on Halifax’s popular Kids’ Regular Saver is down at 4 pc, a third lower than the previous rate of 6 pc.

The rate applies to new savers, so adults renewing their account at the end of the 12-month period will be hit. The account can be opened by adults for children under the age of 16 with £10 to £100 a month. A £100 a month saving at 6 pc gives you £39 interest. At 4 pc you earn £26.

At the end of the 12-month term you can open another Kids’ Regular Saver, but the money already built up is transferred either into the bank’s Young Saver paying 2.25 pc — if you have opened one — or into a poorer paying Save4it at 1.05 pc.

Nationwide has cut the rate on its Smart Limited Access account to 2.5 pc, down from 3 pc. The account is open to adults wanting to save for children. It’s also available for a child aged between seven and 18 to open in their own right — although they must already have another Nationwide savings account to qualify.

You are limited to making one withdrawal a year. If you make any more the rate tumbles to a miserly 0.5 pc.

On easy-access children’s accounts the 2.25 pc from Halifax Young Saver is one of the top rates. Other good deals include 2 pc from Virgin Money Young Saver Issue 2, Skipton BS Children’s Saver and Chelsea BS Ready Steady Save Issue 2.