Childrens Lump Sum

Tre4

Good afternoon everyone.

My 2 children, aged 8 and 11, have both been left £20,000 by their Grandma.

From what I can understand, most childrens savings accounts seem to be only good for regular investments, which is nice until now when a nice little sum is available.

I would like to put the money away for 10 years with no risk.

Many thanks.

Tre4

dunstonh

I would like to put the money away for 10 years with no risk.

No risk free option exists.

Savings accounts that pay less than 4.8% are losing money in real terms (RPI is currently 4.8% and you need to beat that). Investments have risk depending on what type of risk you take on board. Guaranteed capital investments have risk of inflation if you only get your money back.

Its a case of taking a sensible level of risk and not jumping in at the deep end by going from one extreme to another. Risk is a sliding scale. Not an on/off situation.

dancingfairy

Hi. Stocks and share should return decent rates over the longer term but there is of course some degree of risk there. Savings accounts provide no risk to the capital and the only risk is the risk of inflation you need to take into account as mentioned by Dunston.

MArtin has written a good article about childrens savings accounts see here:
http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1089574348,16470,

Also to get the best uptodate accounts follow the link in the article to moneysupermarket and search for childrens accounts.

Then just choose the ones that you feel are best for you ie do you require branch access/internet access/regular saver or not etc and off you go.

Don't forget to keep any eye on them every so often though and check they are still decent accounts and if not don't be afraid to move.

You will need to fill in a form at the bank saying basically that your children don't pay tax and that's it really.

Tre4

Thank you both very much for your advice.

I think tonights activities are somewhere on that moneysupermarket link!

Best wishes,
Tre4