Best long term savings?

madra

Hi, I need some advice about where to invest the money my children inherited from their grandfather. They both have 10K each and his Will stipulated that the money should be given to them when they are 21, which means that I can invest it over, say, a five year period. The money is sitting in an executor account at Barclays at the moment, doing nothing! Clearly, I want to make sure that wherever I put their money it will be safe. I also feel as their father and executor of the Will I am duty bound to make sure their money is invested wisely. Can anyone offer me some sound advice?

alastair_h

It sounds like the children are around 16 years old. If they are they could open an ISA, this however would give them control of a portion of the money (as I don't think you can't open it on their behalf). I have included the best buy Cash ISA link for information. Personally I would steer away from stocks and shares ISA's. I guess you go for a fixed rate bond which will at least guarantee a return and be independent of interest rate fluctuations or savings accounts, link below.

Best Cash ISA's http://forums.moneysavingexpert.com/showpost.html?p=4603369&postcount=1
Bonds http://www.moneyfacts.co.uk/money/savings/1/short-term-fixed-rate-bonds.aspx
or something like this, not sure I'd fix for 5 years though http://www.nationwide.co.uk/savings/bonds/fixedratebonds/introduction.htm

Baldur

alastair_h wrote: »

It sounds like the children are around 16 years old. If they are they could open an ISA, this however would give them control of a portion of the money (as I don't think you can't open it on their behalf).

To clarify, applicants for a Cash ISA have to be aged 16 or over - for a Stocks & Shares ISA 18 or over. Both types of account require the applicant to have a National Insurance Number.

A Cash ISA cannot be opened on behalf of someone else and would give the individual account holder full control over any funds within the account.

Jake'sGran

madra wrote: »

The money is sitting in an executor account at Barclays at the moment, doing nothing! Clearly, I want to make sure that wherever I put their money it will be safe. I also feel as their father and executor of the Will I am duty bound to make sure their money is invested wisely. Can anyone offer me some sound advice?

Just curious, will Barclays charge each year for "looking after" the money. Have you got to leave it with them or could you have it in something like a bond paying 4% untill the children reach 21?

redpin_2

if i was you i wouldnt tell them about the money until theyre 21 but you probably already have main reason i say this is because come when theyre 17/18 they'll probably start wasting money even tho they havent got acces to the 10k

DiggerUK

@ madra,
As it is for five years I would suggest you consider gold bullion or UK coins.
This site will give you an idea of cost.

http://www.coininvestdirect.com/main.php?a=10&id=2&country_id=225

Good luck.

cloud_dog

DiggerUK wrote: »

@ madra,
As it is for five years I would suggest you consider gold bullion or UK coins.
This site will give you an idea of cost.

http://www.coininvestdirect.com/main.php?a=10&id=2&country_id=225

Good luck.

I am a bit of a gold bug, or at least intend to make money from it during the next few years but……. your recommendation is a tad irresponsible.

As an executor the OP has a legal responsibility to look after the capital wisely. The simplest option would be a savings account but you would need an ‘in trust’ arrangement/agreement primarily because of the higher ages, etc.

There is way too little info from the OP to make any comments.

For example, do the children have existing savings accounts? What is the OP’s attitude to risk? Would the OP be willing to invest a percentage? Would the OP be willing to manage the investments, etc, etc, etc.

cloud_dog

Masomnia

DiggerUK wrote: »

@ madra,
As it is for five years I would suggest you consider gold bullion or UK coins.
This site will give you an idea of cost.

http://www.coininvestdirect.com/main.php?a=10&id=2&country_id=225

Good luck.

Are you having a giraffe? Apparently you didn't read this bit 'Clearly, I want to make sure that wherever I put their money it will be safe.'

If you'd suggested the same thing in 1980 you'd have some very disappointed children five years later.

Aegis

This is a case where a guaranteed investment of some sort might be useful. Sure, the returns are likely to be worse than direct investment, but they're guaranteed, which is what you should be looking for when managing someone else's money. If this is of interest, an IFA should be consulted to see if they can assist, as bank guaranteed products tend to be rubbish.

Direct investment in commodities of any description for this sort of money is a reckless suggestion.

DiggerUK

Madra,

If you had gone out on January 21st 1980 and put the whole inheritance in one purchase of gold you would have paid about 370 pounds per ounce.
On January 21st 1984 your children would have been given gold at the value of 264 pounds per ounce.
Result unhappiness.

If however you had made 10 purchases at six monthly intervals over 5 years your average cost would have been 254 pounds per ounce. When you presented the gold to your children it would have risen to 271 pounds per ounce.
Result happiness.

Hope this clears up any confusion from Masomnia.

P.S., 21/01/1980 was the height of the gold spike.

Good luck.

timothyshawn

I would definately go with the Roth IRA or the Roth 401K. Basically this will be all pre taxed funds, meaning whatever you have in there is YOURS and you won't have to worry about taxes being taken out when you make withdrawals.