Best place to put children's Inheritance

cammi

Hi,
After some advice please, my children have inherited 20k each and I'm looking for suggestions to where to put it please. I want a non risk investment and is locked away till they are ideally 21 but minimum 18 (they are currently 10 and 13), maybe have to mature and reinvest in that time. Any pointers would be most welcome. Also do they pay tax on the inheritance or any interest on the savings. Many thanks.

tacpot12

There should be no tax to pay on the children's savings income. If you put it into accounts in their name they will be able to get access to it at 18 if they insist. It will be best if you talk to them about the money occasionally, and how hard it might be for them to save such a substantial sum themselves. Remind them that once it is gone, it's gone.

You can have a look at the MSE page on the best savings accounts here: https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

But your best option for security and ease of operation would, in my opinion, be a Post Office Three Year "Online" Bond. This will require regular reinvestment when the bond term is up, but the Post Office will email you with their current bond offerings so you can pick what you want. The bond is protected under the Financial Services Compensation Scheme.

There are very slightly better interest rates available but from smaller, less well known lenders whose systems may be less well suited to investing for someone else (e.g. a child).

cammi

Thanks for your reply, hadn't thought of the PO. Could you explain 'less well known lenders whose systems may be less well suited to investing for someone else' in what way? To be honest I not planning on telling them about the money till they are much older.

xylophone

The bequests are "indefeasibly vested" in the children?

See post 3 https://forums.moneysavingexpert.com/discussion/comment/73629078#Comment_73629078