Can I move my grandsons' savings to better accounts without showing their ID?

18 October 2016

Q

I have two sons and six grandchildren. I opened a savings account for each of them when they were born. The accounts are in my name ‘in trust for’ the named child. Four of my grandsons are still under 12 years of age and two are now over 18. My sons are both over 40.

I don’t put a lot of money into the accounts but make regular deposits on their birthday and at Christmas, as well as if I have a bit to spare. I have also deposited part of an inheritance I received from my mother into each account.

My problem is that the interest on these accounts is now abysmal. My two grandsons over 18 have Post Office savings accounts, but I can no longer just nip into the Post Office to make a deposit. I have to send a cheque, so they tend to lose out if I’m just making an extra deposit.

The other six are all with Nationwide, with which I also have accounts. I have just received notification from Nationwide that the interest on these accounts is being reduced yet again.

I do realise that officially I don’t own the money in my sons’ accounts or the two older grandsons, but it doesn’t stop me depositing savings to them. At this stage, I don’t feel I’m ready to pass these accounts on to my elder grandchildren.

Can I transfer these savings to accounts with a better interest rate without having to produce birth certificates or passports?

From
JW/via email

A

It’s very unlikely that you’ll be able to open an account for your children and grandchildren without supplying ID if they are named in some way on the account. You may, however, be able to transfer to a better account with the same provider – ask it what other accounts it has to offer.

If you have set up a trust or series of trusts for your children and grandchildren, then you are likely to be restricted regarding which bank accounts you can open, as many accounts will not accept trust fund money. But there are those that do, so it’s important to shop around for the best rates. However, you will still usually need to provide ID for the beneficiary as well as the trustees, which in the case of a minor would mean a birth certificate and passport, for example.

 

If the accounts are still in your name and are not in a formal trust, there is no reason why you can’t simply open up another account and perhaps privately earmark the funds, but you’d possibly need legal advice to make sure that your estate will be distributed as you want in the future.

You could open the accounts in the younger children’s names and act as a signatory until they are older, but you will need to provide ID for them and the money will be available to them at some stage, depending on the account.