Children's Savings Bond
It's never too early to start saving for the future!
Our Children's Savings Bond can help young people save, and watch their savings grow. It is a three-year savings bond requiring a minimum opening balance of just £5 and monthly payments of just £5 thereafter.
- Healthy and guaranteed rate of interest
- One penalty free withdrawal per year
- Tax free interest while the account holder is eligible
- Flexible saving - between £5 and £150 per month
- Open with just £5
- Interest rate guaranteed to be 1% above the Bank of England base rate, during the three-year term
Anyone under the age of 18 can have a Children's Savings Bond via one of our branches or Investments Direct.
For accounts operated through our branches, any child under the age of seven wishing to open a Children's Savings Bond will need a parent or guardian to open and operate their account as trustee(s) for them. The trustee(s) operating the account will be responsible for amending the operating instructions on the account when the child reaches the age of seven, if required.
For accounts operated through Investments Direct, any child under the age of sixteen wishing to open a Children's Savings Bond will need a parent or guardian to open and operate their account as trustee(s) for them. The trustee(s) must remain in place until the child reaches the age of sixteen, after which, if required, the account may be transferred into the child's sole name.
Trustee(s) operating the account on behalf of a child are required to choose the order of names of the trustee(s) on the account. The Society only recognises the first named trustee on the account as being eligible to vote.
What rate of interest will I get?
The rate of interest for the Children's Savings Bond is guaranteed to be 1% higher than the Bank of England base rate and will track this rate whether it goes up or down.
This means that when the Bank of England base rate changes, the interest rate on your Children's Savings Bond will also change within 30 days.
Variable rates effective at 1 May 2008.
| Annual Interest Rates for up to 1 withdrawal and 11 or more payments | |||
|---|---|---|---|
| Balance | Gross P.A.* | Net P.A.* | AER** |
| £5 - £5,400 | 6.00% | 4.80% | 6.00% |
Interest rate is guaranteed to be 1% higher than the Bank of England base rate for the full three year term, provided that you comply with the account terms and conditions. The maximum balance is not inclusive of any interest. Rates are variable. |
|||
How much can I invest?
You can open a Children's savings Bond with as little as £5 or as much as £150. You must add a minimum of £5 up to a maximum of £150 to your account each calendar month after your Children's Savings Bond has been opened, but you do not need to add the same amount each month.
The Society may close your Children's Savings Bond if the balance falls below £5. Your account may not be held jointly. Trustee accounts can only have one named beneficiary. You may not open more than one Children's Savings Bond.
What access to my money do I have?
You will be able to make one withdrawal per annum without notice or penalty. However, you must maintain at least £5 in the account. You can of course close the account at any time without notice or penalty.
A minimum of 11 monthly payments must be made each year e.g. if you open the account in June, you will be able to miss one payment in the following 12 months. If two or more payments are missed in those 12 months, the interest rate will be the variable rate paid on our Scarborough Standard Account/First Post Account, or such other account that the Society considers is similar and is available at that time, until the next payment is received.
What happens after three years?
Your Children's Savings Bond will mature on the third anniversary from the date of opening, following which time we would aim to contact you. Once your account has matured it will automatically be transferred into a Young Supersaver Account, or such other account that the Society considers is similar and available at that time.
Do I have to pay tax?
If you are under 16 and eligible to have your interest paid gross, a parent or guardian will need to complete Inland Revenue Form R85 to avoid tax being taken off your interest. Alternatively, if you are over 16 and eligible, and operating your own account, you will need to complete the Inland Revenue Form R85 to avoid tax being taken off your interest.
What if I change my mind?
As with all our investment accounts you have a 14 day right to cancel period in which you can close your account without charge or penalty. See the Society's General Investment Conditions for full details.
Related terms & conditions
Please ensure you have read all the above terms & conditions, as well as all terms and conditions contained within the terms and conditions section.
How can I apply for an account?
- Please ensure you have read and understood all of the above terms & conditions.
- Either complete our application form or call in to your nearest branch or telephone Investments Direct on 0845 634 3760†.
- Children's Savings Bond is available through the Society's branches and Investments Direct and may be withdrawn at any time without notice.
* The gross rate is the contractual rate of interest payable before the deduction of income tax at the rate specified by law. The net rate is the rate of interest which would be payable after allowing for the deduction of income tax at the specified rate (the net figures quoted assume liability at a tax level of 20% for illustrative purposes only).
** AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. Please note that the account specific Terms and Conditions may preclude you from earning these rates.