Putting money into a savings account for children from a young age is one of the best investments parents can make.
It encourages the habit of saving from a young age and can provide a valuable nest egg when youngsters reach adulthood.
Finding the best return on savings can take considerable research but one account has consistently topped the best-deal tables. The Bank of Scotland's children's regular saver account was popular because it offered 6% interest for the first year, a considerable incentive in these times of consistently low rates. In addition to the market-leading interest rate, the requirement for regular payments was seen as inculcating a savings habit.
It is no longer available to canny Scots, as Alex Aikman discovered when he tried to open an account for a grandchild at his local branch of the Bank of Scotland. Frustratingly, Mr Aikman was told he could open a kids' regular saver account at a Halifax branch in England. Despite the growth in online banking, this children's account can only be opened over the counter, which would require Mr Aikman to make a journey to Carlisle.
Since Halifax and Bank of Scotland merged to form HBOS, which was then taken over by Lloyds TSB to form Lloyds Banking Group, Scottish customers became excluded from one of the best deals available for children. Lloyds has retained the Bank of Scotland branding north of the Border and the Halifax name in England but it appears the division now extends to the services on offer. The explanation from the Bank of Scotland is that their products are now aligned with Lloyds TSB instead of Halifax, but this does nothing to dispel the notion that BoS customers are the losers. Lloyds TSB young saver accounts pay 3% interest but are available only to holders of a Lloyds TSB current account, while BoS young saver accounts pay only 2%. Confused? You should be.
Banks are entitled to withdraw or change the products available but to offer a particular account on one side of the Border but not on the other strains logic to breaking point.
There is a consensus among parents, teachers, financial institutions and even the Financial Services Authority that personal finance should become embedded in the school curriculum. Any lessons that involve the merits of regular savings accounts has gained new interest but not the sort that either savers or Lloyds desire. The lesson could not be clearer: look at all alternatives. Since Lloyds banking group is 61% owned by taxpayers throughout the UK, a recognition is required that this anomaly in children's savings accounts amounts to unfair discrimination and sends out a contrary message on saving.
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