Money left in will for daughter to invest - where?

Hi,

Our 5 year old daughter was left a small amount of money in her Grandmother's will (£2000), this has now finished all the probate etc. and the solicitors are asking us where we'd like to invest this until she's 18.

Obviously £2k is not a huge amount of money but for 12-13 years I'd like to think I put it somewhere reasonable.

Any ideas anybody?

Thanks,

Steve.
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Replies

  • KavanneKavanne Forumite
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    Some kind of children's bond? I think a most banks + BSs do them, different terms from like 1yr +. Is she young enough for the child trust fund? Can you put it in there? I have no idea how they work with lump sums though.
    Kavanne
    Nuns! Nuns! Reverse!

    'I do my job, do you do yours?'

  • ValliValli Forumite
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    National Savings do a Children's Bonus bond...
    link for info.
    Don't put it DOWN; put it AWAY
    "I would like more sisters, that the taking out of one, might not leave such stillness" Emily Dickinson
    :heart:Janice 1964-2016:heart:

    Thank you Honey Bear
  • smart money would be to put it into a Chesham Building Society
    Five Year Fixed Rate Bond which pays 4.59% which you can open by post
  • mrposhmanmrposhman Forumite
    749 Posts
    smart money would be to put it into a Chesham Building Society
    Five Year Fixed Rate Bond which pays 4.59% which you can open by post

    You say "smart money" but thats assuming that we don't enter into a period of high inflation as the gains here would be eroded in real terms.

    I'm not sure where I would invest but I don't think over the time period you are looking at you could really go wrong by investing in a commodities tracker or possibly oil.

    A bit more high risk than the fixed interest figures but much more likely to be able to keep up (or ahead) of inflation imo but obviously this is in line with the risk v reward curve.

    It all depends on your risk appetitie really.
  • You say that my idea is not smart. Correct me if I'm wrong but the Bank of England are very slow to put interest rates up but very quick to put them down. So the interest that they gain from my safe idea is a good one. And even if they do go up your pretty much ahead of the interest rates for a long time due to what I have already said about the Bank of England and the fact at they will only increase the rate in by like a quater or half a point at a time. And since this recession is going to last for a long time, I doubt interest rates will be where they were this time last year this time next year.
  • cloud_dogcloud_dog Forumite
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    You say that my idea is not smart. Correct me if I'm wrong but the Bank of England are very slow to put interest rates up but very quick to put them down. So the interest that they gain from my safe idea is a good one. And even if they do go up your pretty much ahead of the interest rates for a long time due to what I have already said about the Bank of England and the fact at they will only increase the rate in by like a quater or half a point at a time. And since this recession is going to last for a long time, I doubt interest rates will be where they were this time last year this time next year.
    Wow, can I borrow your crystal ball ;)

    But seriously, you may both be correct, and it is possibly worth the OP considering doing both things. A lot of it depends on the OPs risk attitude and what, if any, other sort of financial security the child may have or expect.

    As the OP's daughter is 5 she may have a CTF in which case it might worth putting some in there (you are limited to £1200 per annum.

    Me, I am more of an invest sort of person and considering the OPs daughter has at least another 12-13 years to go I would seriously consider this option.

    My suggestion, without know full facts etc, would be to split it 50/50 savings and investment.

    cloud_dog
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • mrposhmanmrposhman Forumite
    749 Posts
    You say that my idea is not smart. Correct me if I'm wrong but the Bank of England are very slow to put interest rates up but very quick to put them down. So the interest that they gain from my safe idea is a good one. And even if they do go up your pretty much ahead of the interest rates for a long time due to what I have already said about the Bank of England and the fact at they will only increase the rate in by like a quater or half a point at a time. And since this recession is going to last for a long time, I doubt interest rates will be where they were this time last year this time next year.

    I didn't say that it wasn't smart but if QE is allowed to get out of control (this govt hardly has a good track record on the economy) then inflation is highly likely to rise and rise quickly at that.

    You say that its quarter point movements, it wasn't that long ago there was a 1 point reduction in interest rates (remember it?).

    I'm not saying that your idea is the best or mine is the best but your idea wouldn't look so good if inflation got to 6 or 7%.

    Personally, I wouldn't be locking money away for such a long period of time as 5 years as the economy is still in a situation where anything can happen and in that situation tying your money up for an excessively long period of time is probably not that smart. If it was a 1year or maybe 18 month bond then I may be with you but I think 5 years is too long in the current environment and econominc outlook that we look at as its no use putting your money somewhere where it can be eroded by inflation.
  • phizzimumphizzimum Forumite
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    Valli wrote: »
    National Savings do a Children's Bonus bond...
    link for info.

    thanks for this link - it says the maximum for one bond is £3000. does anyone know how many bonds can be taken out per child?
    weaving through the chaos...
  • I've just read through this thread as I have a similar situation. I'm the executor of my Aunt's will and all her nephews were left £1000. There are four of them and three are young enough to have a CTF however, my problem is with the oldest as he is 10 and too old for a CTF.

    I really want to put the money where he can't access it until he's 18 but don't even know what options I have let alone the best one.

    MrPoshman... you suggested investing but could this fit in with my plan? Ideally, I'd like to make the investment his (in his name) just not allow access to it so he can follow it and watch it grow (hopefully!) and learn about investing. Can you give me any more info, or help?

    Thanks!

    TT
  • [Deleted User][Deleted User] Forumite
    0 Posts
    MoneySaving Newbie
    open a sipp for her and invest all the money in oil shares ie bp. or rdsb and get 6.9% yield tax free. Over time buy her more shares in a different defensive stock, like a utility company and watch her sipp grow and grow, add to her holding as the dividends mount up and rest assured that she will not be able to get her hands on it when she is a teenager and wants a car
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