Advice for children's account - while I make a serious decision

hander

My mum has kindly given our children (2 of them), £10,000 each. I've not decided what to do with the money yet but while I do decide, I'd like to put the cheques somewhere other than my drawer.

The cheques are in their names. Their ages are 5 and 1!

What would be MSEers advice? Remember, I'm only looking for short-term solutions. The long-term I will look into.

Thanks in advance.

opinions4u

Northern Rock Little Rock account.

3% interest.

Late Autumn should see some news on Junior ISA and may be worth keeping an eye out for.

atush

Once you have set up the savings accts, think about starting up an investment trust savings plan for them. 25-50/month, you will drip feed into the market and therefore reduce investment risk thru 'pound cost averaging'. It should be a tidy sum by the time they are 18 and perhaps need it to fund university or to set up their own homes away from yours.

ultrawomble

opinions4u wrote: »

Late Autumn should see some news on Junior ISA and may be worth keeping an eye out for.

I wouldn't have thought that they are eligible for a Junior ISA since they will have received CTF vouchers given their ages. It also looks as though CTFs can't be converted to Junior ISAs.

Jegersmart

atush wrote: »

you will drip feed into the market and therefore reduce investment risk thru 'pound cost averaging'. .

well this is a common misconception, all things being equal there is no less risk in drip-feeding (or phased buying) than taking a position because the market could go either way and if you drip-feed lose out on gains in that period. Sure, I phase buy myself at times - but that is because I am bearish in whatever direction at that time. At the moment, I am phase buying commodities stocks and will start the same on Commods ETF's probably after the summer depending on what crude does - but I am not doing this because it "reduces my risk" - I am doing it because I have a view that the market structure warrants it....

Sorry for long post, but drip-feeding or phased buying does not "reduce risk" - that is the bottom line.

xrjtg

Jegersmart wrote: »

phased buying does not "reduce risk"

Buying over a period of time does reduce risk, at least in the sense of ensuring that the performance of your investments is closer to some notional average than it might otherwise be. The claim that is often made is that it is better to phase money in because of some magical property (the mysterious "pound cost averaging" mentioned above), and this is the claim that is false.

Ark_Welder

Jegersmart wrote: »

I am doing it because I have a view that the market structure warrants it....

Does this mean that you are uncertain how your chosen market will move in the next few months so you do not want to commit your capital all at the same time to an investment?

jennifernil

You could put up to £20k each into NS&I index linked saving certificates long term. Keep an eye on them in case RPI drops. You can withdraw any time. After 12 months you do get some interest.

Otherwise, meantime, I agree with the Little Rock account.

xrjtg

jennifernil wrote: »

You could put up to £20k each into NS&I index linked saving certificates long term.

The investment limit for the current issue of ILSCs is £15k.

jennifernil

Sorry, slip of the typing finger! £15 k each of course.