Investing a legacy for a child not yet 18

Kez100

My daughters have both been left £5000 in a will. The solicitors are sending me the money to invest on their behalf until they are 18.

One will be 18 in just a few months but the other has three years to wait.


What investments am I allowed to use?

srcandas

Kez100 wrote: »

My daughters have both been left £5000 in a will. The solicitors are sending me the money to invest on their behalf until they are 18.

One will be 18 in just a few months but the other has three years to wait.


What investments am I allowed to use?

Anything you like if you have the right to invest. But I suspect the best deposit rate you can get would be the better option (i.e. saving as opposed to investing).

Three years is not long enough to guarantee that an investment will not lose money. OK a deposit will lose a little money while interest rates remain below inflation but c'est la vie

Kez100

Ta.

If I can do anything, the eldest would like me to put it in premium bonds as she only has about five months to wait and, then, she would like to put it into an investment account she already has. I thought it would be worth a punt for a few months (I think it takes a while to register as a premium bond in the draw anyway) but they would have to be in my names and not sure if that is allowed, or if it has to be in their name with me as parent, which I don't think premium bonds do.

The, for the youngest, I guess a bit of shopping around for the best deposit rate is what we need to do.

xxdeebeexx

Kez100 wrote: »

Ta.

If I can do anything, the eldest would like me to put it in premium bonds as she only has about five months to wait and, then, she would like to put it into an investment account she already has. I thought it would be worth a punt for a few months (I think it takes a while to register as a premium bond in the draw anyway) but they would have to be in my names and not sure if that is allowed, or if it has to be in their name with me as parent, which I don't think premium bonds do.

The, for the youngest, I guess a bit of shopping around for the best deposit rate is what we need to do.

Skipton BS have a leap account @ 2.75% and this can be held until your daughters are 22yr old ( so I was told by branch manager)

What about a Halifax Junior ISA for your younger daughter. If you have a cash ISA with the Halifax she will get 6% on her investment. You won't be able to use ALL the £5000 but a good part of it.

good luck

dx

ColdIron

Kez100 wrote: »

If I can do anything, the eldest would like me to put it in premium bonds

Premium bonds would, in my opinion, be a poor place for this amount of money for only a few months. The likelihood is that you will win nothing or, if you get lucky, £25. You could probably double this after tax with a good current or savings account

Have a look at the PB calculator
http://www.moneysavingexpert.com/savings/premium-bonds-calculator/

xylophone

For the younger daughter the Halifax JISA provided that you are prepared to open your own ISA with them - the balance could go into Virgin account until next tax year when you could transfer it over? http://www.halifax.co.uk/isas/
http://bank.virginmoney.com/savings/learn/childrens-accounts/

I am wondering whether the Halifax would permit the older girl to hold their JISA for six months? Worth checking for that interest rate? https://www.gov.uk/junior-individual-savings-accounts/overview

Kez100

Thanks all.

We have a Halifax ISA already and, I think, a Halifax share dealing account. We haven't used the latter but the ISA has a few thousand BT shares in it. JISA Sounds a great option for the younger.

At 6% the elder one will probably be happy to leave it a JISA for longer as that is better than her own account. What are the rules on ISAs? My elder daughter already has one, first opened in 2012/13, which she pays her unspent pocket money and any presents she gets into (maybe £300 a year).

xylophone

At 6% the elder one will probably be happy to leave it a JISA for longer

Care - the 6% rate is specific to the JISA which comes to an end when the child turns 18 - the Jisa just becomes an Isa?
Check the T&Cs.