“It is always wise to shop around to see which account best suits your situation, parents should try not be enticed by any upfront gifts as these accounts often have lower returns."
Moneyfacts Best Buys - Children's Savings (22/09/16)
| Provider | Account | Gross | Notice/Term | Min Investment | Interest Paid | Rate Type |
| Halifax | Kid's Regular Saver | 4.00% | 12 Month Bond | £10 | On maturity | Fixed Rate |
| Saffron BS | Children's Regular Saver | 4.00% | 12 Month Bond | £5 | On maturity | Fixed Rate |
| HSBC | MySavings | 2.96% | Instant | £10 | Monthly | Variable Rate |
| National Savings & Investments | Children's Bonds Issue 35 | 2.50% | 5 Year Bond | £25 | Ann'sry | Fixed Rate |
| Harpenden BS | 18 Club | 2.45% | Age 18 | £1 | ½ Yearly | Variable Rate |
While some children’s accounts allow you the flexibility to dip in and out of the savings, however often the best accounts restrict access, which can be useful to allow long-term compounding to do its work.
There can be some restrictions, however, as Ms Nelson explains: "Restrictions can vary between the account being held in trust by an adult, to the parents having to authorise the withdrawals made and sometimes proving the withdrawals being made are for the benefit of the child.”
A simple, straightforward, multi-asset risk-appropriate portfolio works well for Jisas. Rob McMurrichThere is also the issue of low interest rates; if the Bank of England's monetary policy committee decides to lower rates to 0 per cent, there is a rise providers may decrease savings rates further. This, compounded by the eroding power of inflation, could mean far lower returns and subsequently less purchasing power on maturity.
Rplan's September research shows the average easy access Isa rate at present is just 1.11 per cent while the best easy access savings account pays 1.55 per cent a year.
Using these rates, Rplan suggests parents would have to save £310.96 and £298.58 a month respectively to reach the £74,307.08 target by 2034 to meet the estimated cost of sending a child to university.
Help to Buy Isas
If the child is slightly older 16 plus parents could open a Help to Buy ISA for their children and eventually help them onto the housing ladder. Not only can they benefit from a great interest rate but savings in the account get boosted by the Government.
Child will have until 2030 to use the Government bonus so there is plenty of time to get into adulthood and thinking about stepping on to the first rung of that ladder.”
But not everyone is convinced a specific children's investment is the best modus operandi. TilneyBestinvest's Mr Hollands says: "I don't see any merits for restricting yourself to investments that are badged specifically for the purposes of investing for children, which is just a marketing gimmick.
"Instead, choose high-quality investments appropriate for the required time line."
Shares and investment trusts
Karen Clark, adviser at RSMUK, says to help with university fees, parents with their own trading companies could transfer shares to a child over 18, either directly or via a trust.
