where to invest my daughter`s 5K

grifftheriff

My 14 year old daughter has £5,000 savings.She wants it to make as much as possible without any risk and is willing to leave it untouched for 2 - 5 years if need be.I have no idea about where she should invest it-can anyone give us any advice.We have spent hours looking but it is a minefield! She doesn`t mind if it has to be invested in my or her mothers name if that makes any difference.We are both tax payers.Thanks in advance.

Dave101t

without risk? ISA

cloud_dog

Dave101t wrote: »

without risk? ISA

Too young for an ISA.

I would suggest just using Moneysavingsupermarket.com and check out the best savings account offers. You might want to consider splitting the money in to (possiblty) three bits and opening three different accounts:

• £1000 Instant Access (just in case)
• £2000 Short Term Fixed Interest (1 to 2 years)
• £2000 Medium/Longer Term Fixed Interest (3 to 5 Year)
• You copuld even break the 3 to 5 years in to two £1000, one for 3(ish) years and the other for (possibly) 5 years.

I am of the opinion that possibly in a couple of years interest rates will have to go up and you probably don't want to tie your money up for too long just in case better offers come along. Having said this - 'I know nothing', ewtc, etc, etc.

Also, remember to complete Inland Revenue form R85 so as to ensure she gets her interest tax free (assuming she doesn't currently earn income greater than her personal allowance), and also that she can open a ISA savings ISA account once she is 16.

Dave101t

get the parent to invest it in their isa, MSE tools often presume family members 'help' each other out in this respect in order to invest over the years allowance.
cloud dog has the answer pretty stitched up tho!

rb10

cloud_dog wrote: »

I would suggest just using Moneysavingsupermarket.com and check out the best savings account offers.

A bit of a mix of addresses there. I think you mean...

http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#bestbuys

http://www.moneysupermarket.com/savings/

http://www.money.co.uk/savings-accounts.htm

rb10

Dave101t wrote: »

get the parent to invest it in their isa, MSE tools often presume family members 'help' each other out in this respect in order to invest over the years allowance.
cloud dog has the answer pretty stitched up tho!

I don't personally agree with this. She is 14; that's old enough to start learning to look after her money herself.

Getting a parent to put it in the ISA means that the parent is going to have to have responsibility for the money, which means the daughter never learns.

And what if the parents have both filled their ISAs already?

Lokolo

I would tend to agree with splitting it up but I wouldn't put anything in more than 2 year fixes. With interest rates so low they can hardly afford to go lower, so fixing for 5 years with interests not likely to fall, more likely to rise, would mean you are restricting yourself for future potential.

Halifax Online Fixes are good beginners, get her involved with it. Teach her the wonders of compound interest.

Dave101t

well if she is old enough to learn about saving, she is old enough to learn about the best ways of saving, which would be a family isa in the way i described. of course as the law technically wont allow her to save in an efficient manner, she could just leave the money in her standard cash accout and learn the hard way about actually not earning any interest.
either way, she learns something about the value of money.

ses6jwg

Just opened a Halifax guaranteeed reserve as a trustee for my daughter - 2 years @ 4.30% tax-free.

Also opened a 6% childrens regular saver.