Martin Lewis tells all teenagers how to get £50 for free

Martin Lewis tells all teenagers how to get £50 for free Money Saving Expert’s Martin Lewis has urged parents to look at high interest savings accounts and Junior ISAs - Bookmark - CommentsGo to comments Teenagers could get £50 for free if they switch to a different bank account, according to Money Saving Expert’s Martin Lewis. In a bid to help parents be smarter with how they help their child save for their future, Mr Lewis has urged parents to not invest in Premium Bonds and instead to open an ISA or switch to a high interest savings account. “As a nation, we're too risk-averse, which is why my biggest push is for parents or grandparents to consider investing for your child. And no, I don't mean Premium Bonds (which, as I'll explain, often underperform for children),” Mr Lewis wrote in his Money Saving Expert tips email. “Some parents who lack financial confidence or skills can feel a guilt that they may be subserving their kids because of it. So today I want us to try and help you with that,” he said. So, how should parents save for their child’s future? Why an ISA could be the best option Parents can save or invest for their child in a normal account with a Junior ISA, which is a tax-free account which an under-18 can have up to £9,000 total paid into each tax year. Mr Lewis explained there are both cash JISAs, where the interest isn't taxable, and Shares JISAs where the investment gains and dividends aren't taxable. A child can have both, but the limit is still £9,000 added a year in total for the two. JISAs must be opened by a parent or guardian with parental responsibility. At 16, the child can take control of it themselves. Some JISAs offer more than 3 per cent interest while other savings accounts for young people offer as much as 5 per cent a year. How could your teen get £50? One savings account could help your child get £50 for free. Get a free fractional share worth up to £100. Capital at risk. Terms and conditions apply. ADVERTISEMENT Get a free fractional share worth up to £100. Capital at risk. Terms and conditions apply. ADVERTISEMENT Mr Lewis explained the Santander 123 Mini children’s bank account pays £50 into the account of new customers from age 13 up to and including age 17. To get the bonus, £50 needs to be put into the account within 31 days. He added that the account itself offers a contactless debit card and tiered interest: 3 per cent on all savings between £1,500 to £2,000, 2 per cent on £1,000 to £1,500 and 1 per cent below £1,000 but nothing if more than £2,000 is in the account. What about Premium Bonds? While many parents and grandparents have gifted their children Premium Bonds over the years, Mr Lewis says “many would've done better sticking with normal top savings.” Premium Bonds are government-backed savings, where the interest is based on a prize draw. Mr Lewis said the current prize rate is 4.35 per cent, which is less than some savings accounts and not everyone will win this amount. Premium Bonds are good for people who pay tax on their interest and have used up their ISA allowance. It’s also best to invest more than £5,000 to get a better chance of earning closer to the published prize fund rate. Because most children have a small amount saved and aren’t tax payers this is probably not the best option. Join our commenting forum Join thought-provoking conversations, follow other Independent readers and see their replies Comments