Junior is now 13 and so it’s appropriate that he has his own bank and savings accounts. It’s all a bit silly really, as effectively it is just my money sitting in other accounts (bar the occasional cash present from friends and relatives which may come his way). But it’s an important step on the way to adulthood, giving him some responsibility with money.
So last week we opened his first bank account. We chose Halifax because we already have a Halifax Kid’s Monthly Saver account into which I pay £100 a month and which earns an excellent fixed rate of 4.5% a year. After a year is up, the proceeds get paid into a Kid’s Saver account which earns 2% on balances up to £5,000 but only a measly 0.2% on anything above £5,000. However, this account doesn’t come with a cash card. That’s why we’ve just opened an Expresscash account. It comes with a debit card and a mobile app and you get a tiny bit of interest (0.5% on up to £2,499). Fortunately, you can’t go overdrawn.
But you can do contactless shopping on it – so I’m going to make sure there’s never very much money in the account. Junior is off on a school trip to France at the end of this month and he won’t be taking it with him. Although the information on Halifax’s website points out holders can use the card contactless internationally, you have to click through to further information to find out that there’s a £1.50 per transaction fee for overseas cash machine withdrawals with an extra 2.99% foreign currency exchange fee. And using the card to pay for things abroad means a 50p fee plus the 2.99% again. So the card is staying at home and he’ll be taking a few Euros instead to spend on rubbish.
I’ve also overhauled his Jisa. I am in the process of shifting it from a share Jisa to the National Savings & Investments cash Jisa. I know that shares will probably do better than cash over the long time but it’s only five years until the boy can get his hands on the Jisa funds, so that’s not long term. Added to that, I put half of his money in the Woodford fund that Jane’s written about and the performance has been poor. The NS&I Jisa pays 3.25% variable and that strikes me as a pretty good deal. I do have to pay fees to move the Jisa away from shares into the NS&I deal, but they aren’t that high and I think it will probably be worth it. I do take Jane’s argument that I should have just moved his Jisa into better funds, but I’m going for certainty over speculation. Anyway, I have now completed the spring clean of Junior’s finances: perhaps I need to do my own next.
See our guides to saving for children.