Best home for teenager’s insurance payout
Michelle Slade at financial information company Moneyfacts replies: As your daughter is 15, you could consider a children’s savings account. Clydesdale Bank is currently paying 6% on its five-year savings bond. Access is not permitted during the term of the bond, otherwise the account will be closed. Alternatively, the Halifax Save4it pays 5.55%.
Since the credit crunch began, rates on children’s savings have not increased in the way that regular savings accounts have because providers assume that children will not deposit as much as adults.
The highest rates on the market are on fixed-rate bonds, but these are not usually available until age 18, although a few are available at 16 years.
However, a number of variable-rate savings accounts are open to someone aged 15 years of age. If you are happy for your daughter to have instant access to the money, you could consider the West Bromwich BS Stratus No Notice account which pays 6.56%. On the other hand, you could opt for an account where notice is needed before withdrawals are made. Derbyshire BS is paying 6.55% on its Postal 60 Triple Guarantee - 60 days’ notice required - or the Chelsea Building Society 90 Day Notice account, which pays 6.50%.