best place for £10k risk free

sc123_2

I have £10K to put away for two of my daughters. I do not want there to be any risk involved. Does anyone know the best place for me to put this. I tried to open a bond with Northern Rock in November but after them losing my application and it being resent they informed me that I cannot open an account for my children as one of the trustees is my solicitor and it needs to be just a parent/s. They said nothing about this when I phoned them prior to sending the application to make sure it would be ok. Now their bond rate has dropped to under 5%, it was 5.2%.

Many thanks

Chadsman

Are you prepared to tie up the money for x years, do you prepared to give notice for access to the money.
Most banks and Building Societies have childrens accounts which pay significantly better rates than similar accounts for adults.

codetown

If you need instant access and can live with future variations of interest rates:
Alliance & Leicester Online Saving Issue 2 (5.2% gross) up to 25k

If you wish more tied-up solutions (such as 1-3 years bonds) you might want to look at smaller building societeis, such as THE LOUGHBOROUGH BS or Skipton. They both have bonds for 1 or more years at fixed rate just slightly above 5% gross.

ReportInvestor

If either of your daughters is 16 then an ISA could also be considered.

If they have been born recently then a Child Trust Fund might be appropriate.

You don't say if the money is from yourself or grandparents/others which is relevant as this affects the tax on any income.

sc123_2

Thanks for the replies. The money will not be available until the children are 18 or 21, have not decided yet so don't mind it being tied up. The money came about as part of a divorce settlement. the children are 6 and 8 years old. I will look into the accounts mentioned.
thanks

ReportInvestor

I think that will count as a parental contribution - if so income tax will be payable by a parent once the income for each child reaches £100 gross pa, which it obviously will in your case.