Saving accounts

Today most of the saving accounts and Cash ISA in the UK offer annual interest rates between 0.5% up 1%. If you are looking for higher annual interest rates such as 2% and you intend to save money for your children then you have to start looking at some product such as a Kid's Regular Saver where the interest is higher, but the money is locked for at least a year and the account can be opened only in name of your child.

One of the best Kid's Regular Saver at the moment is offered by Halifax which currently offer an 4% GROSS annual interest rate for kids from 0 to 16 years old, deposits are up to £100 at month which is £1,200 for the first year. This product may work well for you only if you plan to save for a very long time and you want to lock your money till your kid will be 16 years old. Another good saving account that I know is the 123 Santander Account where you can get Cash Back on your bills and they also offer an annual interest rate of 3%, but you have to pay a monthly fee of £5 and the interest is paid only on amount up to £20,000. After the £60 annual fees (£5 per month), on an investment of £20,000 this will be equivalent to an interest rate of 2.7% per year (£600 - £60 NET interest).