Child long term investment.

Malthusian

xylophone wrote: »

A cash JISA is not a dump - at the moment the rate offered is above inflation.

Because it's a loss-leader and the expectation is that the OP will leave it dumped in cash when the rate is reduced to 0.5%.

The OP could go through treasury management every year to keep transferring it between cash ISAs, which would still be likely to make lower returns than a globally diversified investment over a 17 year timeframe despite being more effort. Or they could use a globally diversified investment, make more money and spend more quality time with the daughter.

The terms of the will ( it seems an implied bare trust) do not actually grant powers of investment to the parent.

The OP doesn't need them to be.

The parent has to make a reasoned choice for the child.

The legal duty of trustees is to invest the child's money as a prudent person of business would.

And of course, the parent could split the bequest between a stocks and shares JISA and a cash JISA - Vanguard, for example, would accept a lump sum of £2000 and their charges are low.

The only thing cash investment achieves with a 17 year timeframe is to lose the beneficiary money. In around 12-15 years it may make more sense to de-risk if the beneficiary says she wants to spend some or all of the money when she turns 18.

xylophone

I do not disagree that a stocks and shares option is likely to be the better choice.

But there is no compulsion on the parent to choose that option.

If an above inflation return can be achieved on the £4000 within a cash JISA (and why should the parent not keep an eye on the rate), then this is a reasonable choice to make.

Nobody is suggesting that the cash should be "hidden in the ground....":) Matt 25......