Large lump sum kids savings account

debbie_mck2b

Hi there,
My 2 year old has inherited a considerable sum of money from my mum who passed away last year. All the savings accounts I've looked at have £100 a month limit or maximum lump sums of a few thousand. I'm looking in excess of 30k, what is my best options for this money? I'm not interested in investing it on her behalf. I just want it to sit in a decent savings account until she's at least 18.

Thanks in advance.

cloud_dog

What is the wording of the inheritance?

debbie_mck2b

Nothing specific. Just that she was entitled to a percentage of the overall estate. 

eskbanker

debbie_mck2b said:

I'm not interested in investing it on her behalf. I just want it to sit in a decent savings account until she's at least 18.

Understandable to want that but unfortunately there isn't such a thing as a decent savings account that'll protect the value of £30K for 16 years, so you'll need to choose between putting it into a cash deposit account that will (in all probability) lose real-terms value to inflation, or investing it on her behalf.

debbie_mck2b

Ideally I'd obviously like her to benefit from earning interest over the next 16 years, but my main priority is that the money is safe and secure. I will never invest it for her as if it ever ended up losing money, I'd feel terrible and ultimately I don't feel like it's really my money to be able to do that. I'm my parents made a similar decision that ended up resulting in a loss of my money for something that I had no say in, I would be pretty annoyed.

Even with a cash savings account, all the kids ones I have seen have maximum amounts you can deposit and 30k by far exceeds them all. I'd rather have the money all together than dotted about in umpteen accounts all over the place.

eskbanker

Not sure you've really understood the point I was making, but, in the context of your chosen constraints, the best (aka least worst) option would probably be to put the money in Premium Bonds, for now at least....

cloud_dog

Taking the previous 16 years of inflation in to count and projecting forward, £16k will only have the purchasing power of £10k in 16 years time (plus any interest of which there is little).  Just saying.

strawb_shortcake

You could open a cash JISA and add £9k per year hold the rest in PB's until you can pay the remainder in. Coventry Building society offers 2.95% at the moment I think??

My eldest children were some of the first given a CTF and looking back I wish I'd been better educated in investing money as I had the same concerns as you, so don't dismiss the idea of S&S before looking into it more

xylophone

If your daughter has an absolute right to this bequest without any condition or stipulation, then it "indefeasibly vests" in her and she has to absolute right to access and control at the age of 18.

Have you opened a Junior ISA for her? The Coventry BS is currently offering 2.95%.

https://www.coventrybuildingsociety.co.uk/consumer/product/savings/children/junior-cash-isa.html

You could deposit up to £9000 in this tax year and another £9000 on 6 April.

With regard to the balance,  you might consider depositing  £5000 here

https://www.bathbuildingsociety.co.uk/savings/personal-savings/Junior Saver

and the balance perhaps  here
https://www.skipton.co.uk/savings/childrens/childrens-saver

with a view to moving into the JISA (assuming interest rate was still favourable) in subsequent years.