It is feasible to buy premium bonds for grandchildren in other countries, but you should check to see if it is permissible to do so in their home country, as some nations have strong gaming and lottery rules. Although there are no guaranteed returns with premium bonds, they are tax-free in the United Kingdom and you could win rewards.
Can you buy Premium Bonds from another country?
We’ve always been a UK savings company with HM Treasury backing, however we do have some international customers. There are a few things you should know if you’re thinking about relocating abroad or already live outside the UK to ensure that our accounts are still appropriate for you.
You need a UK bank or building society account
You’ll need a UK bank or building society account in your name to save with us. This is because we can only send and receive payments in pounds sterling to and from a UK account.
Can grandparents purchase Premium Bonds on behalf of their grandchildren?
Premium Bonds can be purchased by anyone who is 16 years old or older. On behalf of their kid or grandchild under the age of 16, parents, legal guardians, and (great) grandparents can invest.
No interest is paid on Premium Bonds. Instead, your Bonds will be entered into a monthly prize draw to win tax-free gifts.
Premium Bonds – the prize draw
Every month, almost two million awards are distributed to lucky Bond holders whose numbers are determined at random.
For every £1 you invest, you will receive a unique Bond number. Every month, each number has a separate and equal chance of winning a prize.
On the National Savings and Investment (NS&I) website, you may learn more, apply online, and check if you’ve won if you have Premium Bonds.
Can I buy Premium Bonds in Australia for my grandchildren?
Premium Bonds for children under the age of 16 can be purchased by anyone. It’s acceptable if the youngster already has some Premium Bonds; they can hold up to £50,000 worth.
If you are not the child’s parent or guardian, you must notify them before purchasing Premium Bonds, since we will contact them directly for things like giving proof of identity and address.
- Please double-check that the parent/guardian is willing to take after the child’s investment and that you have their permission to give us their information.
- We’ll verify everyone on your application’s identity and address, and we may need to request documentation to prove it.
- Please inform the parent/guardian that we may contact them to request proof of identity documentation.
We’ve put up a quick guide on how to top up a child’s funds, whether you’re a parent, grandparent, or family friend:
Is it possible for me to open a savings account for my grandson who lives in another country?
“The banks don’t seem to make saving on behalf of non-residents easy,” says Patrick Connolly, a qualified financial planner with Chase de Vere. While they may make justifications for not accepting non-residents, there is no legal barrier to grandkids living overseas creating a savings account. Some banks are merely being obstructive because it is most likely a loss-making venture for them.”
According to the latest estimates from the Office for National Statistics, emigration from the UK has been slowly dropping since a peak of 427,000 in 2008, reaching 320,000 in the year ending June 2013. Since 2001, emigration has been at an all-time low. Fewer people are fleeing for work-related reasons, which has decreased by 11,000 from the previous year to 188,000 in the current year.
“People banks that will let you create an account often give you lesser rates of interest and may not accept HMRC’s form R105, which allows interest to be paid gross, without deduction of tax, to those who are not usually resident in the UK,” Mr Connolly says.
“The only true solution is to keep asking banks and building societies until you find one that will accept non-residents, doesn’t penalize them too much with lower interest rates, and accepts the R105 form.”
Clydesdale Bank and Yorkshire Bank, both subsidiaries of National Australia Bank Group, offer the Headstart Savers Account as one alternative. A grandmother can open an account on behalf of a kid who is a non-UK resident if they meet the identification requirements, which include supplying a copy of the child’s current passport, birth certificate, or NHS medical card. Non-UK residents are permitted to finish the R105. The gross interest rate due on this account, however, is 1.5 percent (one percent above the Bank of England base rate, which is now 0.5 percent), making it uncompetitive. Halifax pays far more: its Kids’ Regular Saver account pays 6% interest, while its Young Saver account pays 3%.
If I live in Spain, may I buy Premium Bonds?
When you move to Spain, you can keep your Premium Bonds, but they will no longer be tax-free, and all of your winnings will be subject to taxation. Residents of Spain, on the other hand, have access to tax-efficient investment instruments that can lower taxable income and hence income taxes.
Is it possible to have a UK savings account while living abroad?
If you open an Individual Savings Account (ISA) in the UK and then relocate abroad, you won’t be able to deposit funds into it until the following tax year (unless you’re a Crown employee working abroad or their spouse or civil partner). As soon as you cease to be a UK resident, you must notify your ISA provider.
The everyday option: a children’s saving account
Consider a children’s savings account if you want to give your grandchild a gift that won’t break or get uninteresting.
Some children’s accounts pay a significantly greater rate of interest than regular accounts.
Getting your grandchildren to open a savings account at a local bank or building society is a fantastic approach to start teaching them about money.
You might tell your grandchild that if they save money instead of spending it all at once, they would have a larger sum to spend on bigger purchases. Also, emphasize that their money is creating money when they receive interest.
It’s simple to save for grandchildren as a grandparent. If you present sufficient proof of identity, such as a birth certificate, you can create a savings account for them.
- If the money comes from a grandmother, the interest on the child’s account will not be taxed, unlike money donated by a parent, which will be taxed as if it were earned by the parent.
What is the best savings account for a grandchild?
The best rates are usually found in regular savings accounts. However, in order to get the interest rate, you’ll likely have to pay a certain amount each month. We’ve compiled a list of the best-paying regular savings accounts.
You might open a fixed-rate savings bond, which pays a high rate of interest. The money is, however, locked up for a specified period of time, usually between one and five years.
Here you’ll find the greatest fixed-rate bonds. We also provide a list of the top savings accounts for kids.
Learn about Mia’s grandmother, who was able to pay £50,000 in school tuition after selling her property.
The investment option: junior ISAs
If you’re thinking ahead and want to aid your grandchildren when they’re older, get a junior ISA.
A junior ISA for a kid under the age of 16 can only be opened by parents or guardians with parental responsibility. However, anyone can add to the accounts up to the annual limit of £9,000. (2021-22 allowance)
- Junior ISA for stocks and shares: the money is also tax-free, but you can invest it in the stock market.
Cash may appear to be a safe bet, but with interest rates as low as they are, investing for as long as 18 years has a better chance of defeating inflation.
- Let’s say you deposited £500 into a junior stocks and shares ISA shortly after your granddaughter was born.
- Your grandchild’s pot might be worth roughly £14,350 when he or she turns 18. This assumes a 5% annual investment growth rate, minus 1% charges.
Because only the child can take the money out after they turn 18, using a junior ISA ensures that the money gets to your grandchild.
WARNING: They may spend the entire lump sum on fast vehicles and wild parties, but you still have time to impart financial advice.
If they do not spend it, the account will be moved to an adult ISA.
Is it possible for a parent to cash in a child’s Premium Bonds?
Buying NS&I Premium Bonds for a youngster is a fantastic idea because it’s a gift that keeps on giving (possibly).
Premium Bonds can be purchased on behalf of a kid by anybody over the age of 16, thus aunts, uncles, and even family acquaintances can participate.
Furthermore, NS&I’s decision in 2019 to reduce the minimum investment amount from £100 to £25 makes them a considerably more practical, or inexpensive, gift.
Instead, how about purchasing bonds for yourself? The following are the simplest methods for purchasing Premium Bonds.
How to buy Premium Bonds for your child
Parents and legal guardians can apply online, over the phone, or by mail to purchase Premium Bonds as a gift for their children.
Whether you’re buying for the first time or adding to your collection of Premium Bonds, you’ll need to be registered with NS&I.
As previously stated, you must invest at least £25 in Premium Bonds, with each £1 producing one unique bond number.
Every number has an equal chance of winning a prize, so buying more increases your chances of winning.
Until your child turns 16, you will receive confirmation of transactions, money for bonds cashed in, and rewards won.
Do you want to know whether you’ve won anything? The most recent results can be seen in this article.
Buying Premium Bonds for someone else’s child
If you want to spoil your grandchild, niece, nephew, or even a family friend’s child, you can apply online or by mail for an electronic or paper gift card to give to the child.
Your investment will be acknowledged, but only the chosen parent or guardian will be able to manage and cash in the bonds.
Before purchasing Premium Bonds for someone else’s child, there are a few things to consider.
Of course, you’ll want to make sure the parent or guardian is okay with you sending over their information and that they’re happy to look after the bonds.
These facts include the child’s and parent’s or guardian’s dates of birth and addresses, as well as the child’s Premium Bonds holder’s number (if they have one).
Everyone on the application will have their identity and address checked by NS&I, therefore there’s a risk that documentation will be required.
To avoid any unpleasant shocks, inform the parent or guardian that NS&I may contact them to request documentation to establish their identity.
Premium Bonds are detailed in detail, including how to purchase them, how to cash them in, when winners are revealed, and more.
How long does the process take?
If you’re buying the bonds as a present for someone special, you’ll need to prepare ahead and apply ahead of time.
NS&I hopes to open new accounts in seven to ten working days, but because everyone’s name and address on the application form must be validated, it will most likely take longer.
What happens if the child wins?
If the child outperforms the odds and wins a prize, the parent or guardian will have to decide what to do with it.
There’s no need to be concerned about tax implications. While a child cannot earn more than £100 in interest per year from savings, this does not apply to Premium Bonds winnings because they are rewards.
Finally, make sure the child’s information is up to date: there are millions of pounds in unclaimed awards held by bondholders under the age of 16.
Is it possible to cash in my child’s Premium Bonds?
Not a member yet? You don’t need to create an online profile to withdraw money from your or your child’s Premium Bonds. All you have to do is complete a little online form. Make sure you have access to your account information.
Please note that in order to withdraw or close the account, you must be the person responsible for the child’s Premium Bonds.
You can withdraw money from Premium Bonds while ensuring that particular Bonds remain in the draw by filling out a form online.
A cashing in form can also be downloaded, printed, and completed. Then send us your completed form along with the Bond certificates that need to be cashed in (if you have them).
What is the procedure for purchasing Premium Bonds for my grandchildren?
Grandparents can purchase premium bonds for their grandkids just as they can for themselves.
They can purchase them online, over the phone, or by mail, but they must first register with NS&I.
Once grandparents have created an account, they will be responsible for it until their grandchild reaches the age of 16.