The best savings account for your baby

Because your baby will not be not be able to spend their savings until they are much older, you should take advantage of the many accounts available with high interest rates. This means while your baby is young, their savings will be given the chance to grow. If you have a bank you can visit their financial advisor for advice on their best savings account for a baby although you should shop around at other banks and building societies too.

An ISA or an Individual Savings Account is probably one of the best savings account for your baby. They are tax-free flexible and really cheap to start and they offer your baby the chance to have substantial savings for when they are older. In fact, many people use this kind of account for their young children's savings so they have a deposit for a house when they are older or so they have the option to pay for their own university fees. There are two types of ISA, a cash ISA which works in the same way as your average bank account or a stock ISA, which is linked to the stocks and shares. While the cash ISA is risk-free, the stock ISA has the most potential for rapid growth of savings. Before putting your baby's savings into an ISA, speak with an independent financial adviser so you are completely aware of any risks or possible charges.

High interest accounts are another option for your baby's savings, with the Halifax currently offering the best savings account for youngsters. They have a rate of 6.0% fixed for 12-months. If you want something longer, the Bradford and Bingley building society are offering an interest rate of 5.55% fixed for 2-years. Both of these accounts require an adult trustee and once your child reaches 13-years-old their money will be transferred to an age-appropriate account.

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