Looking to the future savings

IamZlatan

Good morning to all

A little bit of background, im going to be an uncle (twice) early next year and want to open a savings account for my niece / nephew. My partner and I want to be able to give a lump sum to the kids on their 18th birthday, for a holiday, car, whatever they choose.

Would it be better to open accounts in their names? Higher interest rate for children?

Can anyone point me in the right direction for information or any recommendations?

Much obliged

Zlatan

bowlhead99

To be honest there are tons of threads about investing for children, saving for children, saving for my nephew / niece/ grandchild etc. Suggest you start with an 'advanced' search on this forum.

Generally if you have 18 years, a 'higher interest rate' account is not going to cut it. You would not really expect to beat inflation in the longer term. So, some sort of stock market based investment is likely to meet your needs better. Investment trusts, S&S JISAs etc rather than cash in a bank account. The latter is suitable for rainy day spending or the odd present when they are growing up - not for an 18 year term. Think about how far your cash goes now compared to in 1996. Your goal is to grow the cash not maintain the cash, so you need to take some investment risk.

IamZlatan

Thanks bowlhead, ill have a good look with an advanced search later on.

I hadnt thought about a stock market based investment but if its worth it ill definitely do some research!

xylophone

If you wish to make regular contributions, you might consider an investment trust held in bare trust for each child.
example http://www.sit.co.uk/private-investors/products/stockplan-a-flying-start

You and one of the parents could be the trustees.

The children will be entitled to a JISA - the child's parent would need to open it but you could contribute.

https://www.gov.uk/junior-individual-savings-accounts/overview