children's long term savings

paulondon

Hello there
My mother wants to lock away £3000 for 15 yrs for my 3 yrs old Daughter. Any suggestions for the best product?

jackyann

I have been given some helpful advice on this forum, and hope they also reply to you.
The big decision is: Junior ISA or not?
The Junior ISA rates are not as good as other long-term savings. Unless your daughter becomes a child prodigy, she won't pay tax anyway BUT at 18 the money in her Junior ISA will continue to have interest paid tax-free (unless the government changes its mind?!?!)
So you are gambling as to whether she is likely to need to cash her Junior ISA at 18.
Another decision is: Regular saver or not?
Best rates are with Regular saver, so some canny souls invest in a lower interest account that enables them to make regular withdrawals into a Regular Saver high interest account. you have to do the sums.
You can't take out a NS&I certificate until age 7 (I think) but if your mother wanted to go that route, she could buy them, and leave them to your daughter in her will (advantage is that if she needs to share with other grandchildren / circumstances change it is your mum's decision, disadvantage may be something like dementia, so statement of wishes / PoA needed)
Hope this helps, and I shall look out for other replies as I have not yet made my decision.

xylophone

The three year old would not be eligible for the Junior ISA as she is eligible for the CTF?http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/SavingsAndInvestments/ISAsandJuniorISAs/DG_199672

As it is for fifteen years, perhaps a lump sum investment into an Equity Income Fund (Invesco Perpetual Higher Income Acc, Troy Trojan Income Acc, Investec Cautious Managed Acc etc) through a "re'" account with Hargreaves Lansdown? https://www.hl.co.uk/free-guides/investing-for-children2
Or a lump sum investment into an Investment Trust might be considered? http://www.thisismoney.co.uk/money/saving/article-1604866/Investment-trusts-for-children.html This article is a few years old but might be of interest - a 're' account can be opened outside a CTF if preferred.

If a cash investment is required, then a "re" account can be opened (don't forget R85) with many financial institutions - you need to choose the account in which you are interested and find out if it can be held in this way. http://moneyfacts.co.uk/compare/savings/accounts/search/
However see http://www.hmrc.gov.uk/tdsi/children.htm for what needs to happen when a child turns 16 as it is desired to keep the money in trust until the age of 18.