How to get best return for children

climbingcog

Hi,
I am looking to put aside about £1000pa for my child over the next 20+ years (roughly). Any ideas on what I would be best to do with that so that I get the best return? Likely I would be putting away £85 per month.

Currently I have two Santander 1-2-3 accounts getting 3% interest (one is joint with my wife). Should I leave the money there? Should I go for the 5% TSB account until I reach the £2000 limit? Is there something better that is for regular savings over a long time?

It's so confusing! I'm tempted to speak with a financial adviser but through I'd ask here first.
Thanks in advance!

xylophone

Presumably you are not giving this money to your child ( eg in a JISA) but holding it in your own name with the idea that you will use it for your child's benefit at a time of your choosing?

With regard to Santander's 123 account, the interest rate drops to 1.5% in November.

Perhaps you should think of your ISA as "earmarked" for your child - the stocks and shares option could be a wise choice over so long a period.

http://monevator.com/how-to-invest-for-children/ this refers to JISA but the same ideas can be applied to your own ISA.

http://monevator.com/compare-uk-cheapest-online-brokers/

climbingcog

xylophone wrote: »

With regard to Santander's 123 account, the interest rate drops to 1.5% in November.

I've missed this, when did this come out? Do you have a link to the news?

climbingcog

Actually, just found it on the news. Thanks for highlighting.

Flobberchops

Are we talking children's accounts?

If so, *probably* the best returns are to be gained from a S+S JISA. Certainly my daughter's one is beating cash by some margin at the moment but of course a perfect combination of disasters could wipe out its value tomorrow (I'm betting that won't happen).

Outside of that Halifax do a Kid's Regular Saver giving 4% and a monthly maximum deposit of £100 which sounds pretty perfect for the sums you're talking.

There are of course many adult interest-paying accounts that you could keep the cash in, earmarked for a future gift. Personally I like to keep funds separate both for ease of budgeting and to avoid any temptation to "borrow" long-term funds for short-term necessities!

richtips86

Hijacking this thread a little, and probably a very stupid question but is it possible to open a Child SIPP as well as a JISA?

bottleandahalf

richtips86 wrote: »

Hijacking this thread a little, and probably a very stupid question but is it possible to open a Child SIPP as well as a JISA?

Yes. But Christ only knows what age our children will be able to draw their SIPP.