junior isa vs child trust fund

llakeland

My 2 daughters have received £1000 inheritance recently and I dont what best to with it. My eldest is 15 and looking to go travelling in 3 years so doesnt need access to it for 3 years. My youngest has a child trust fund stakeholder with rbs. What would be the best thing to do for each of them?

JuniorSherlock

Well I suppose you could drip feed the money into one of those high interest savings accounts for your eldest as they often do the highest rate of interest. Or you could open a Junior ISA for her (although many banks ask that the parents also have an account with them) which enables you to top it up every now and then.

For the youngest, can't you just deposit the £1k into the trust fund? Or is there a maximum amount you can put in each month? I think those tax-free trust funds probably perform better than savings accounts.

xylophone

Assuming that the maximum has not been invested in the CTF this year you could pay in the £1000 there.
I am assuming the money has to be held until each child is 18 so you could open any account of your choice that accepts a "re" or trustee designation - a three year bond might suit.
http://moneyfacts.co.uk/compare/savings/accounts/search/
See http://www.hmrc.gov.uk/tdsi/children.htm for information about R85 and what happens when a child turns 16 and what to do about reclaiming tax on "re" accounts.