What's the best future-proof way to invest money for a child?

NewToDadding

I just came into a small inheritance and was wanting to invest/save some for my 3 year old son's future. What would be my best risk free option for this?

I don't want to just stuff it into a bank account where it will sit and do nothing for him, but I also don't want to put it into a scheme with risk for collapse etc... 

I heard investing in something like silver or gold might be an good option as it would gain worth over the years, but that has risk of theft or loss or even just being ripped off when it came to sell.. 

So what other good options is there to consider? I remember as a child there used to be national savings and such but is that even still a thing and if so, is it safe?

Thanks in advance and I look forward to hearing your advice and suggestions. 

eskbanker

There's no such thing as 'risk free', you just need to choose which risks are the most/least palatable.

Depositing money in a savings account is highly likely to suffer inflation risk, i.e. it'll lose real terms value.

Buying commodities like precious metals inherently involves price volatility with no guarantees of coming out ahead.

The option preferred by most on here is to invest via collective products such as funds, which offer diversification to minimise risk of long-term capital loss.  A Junior S&S ISA is a suitable vehicle for this, to avoid taxation....

cx6

Indeed - there is no risk-free option for children or anyone else

That said, since your child is only 3, then the biggest risk is likely to be inflation.

NewToDadding

Yes, inflation was a worry, hence why I was thinking precious metals as its most likely to keep its value regardless of inflation. 

I will take a look at the junior isa, thanks. 

Aegis

NewToDadding said:

Yes, inflation was a worry, hence why I was thinking precious metals as its most likely to keep its value regardless of inflation. 

I will take a look at the junior isa, thanks. 

Look at equity trackers as well.  Received wisdom is that the majority of returns in the long run come from dividends, so investing into something that generates dividends seems sensible.  Precious metals don't do this, so you ultimately rely on someone paying more than you for the same asset at some point in future.

jimjames

NewToDadding said:

Yes, inflation was a worry, hence why I was thinking precious metals as its most likely to keep its value regardless of inflation. 

I will take a look at the junior isa, thanks. 

You might also want to review risks, on the one hand you've said a couple of times you want to have no risk/low risk yet have also said you're considering precious metals. They certainly aren't risk free and you could end up with less than you put in if the price cycle isn't favourable. You only need to look at the charts over the last 40 years to see the points where you could have lost money.

Albermarle

The basic options that most people look at are 
1) Bank or building society savings accounts . Your money is safe but the interest rate will normally be below the rate of inflation , so your money loses value slowly . These are most suitable for shorter term saving .
2) Similar to 1) but saving with National savings , including Premium Bonds . However the same problem applies as 1) , but even more so. 
3) Investing in Stocks and shares via an ISA or pension . Here there is a risk of your money going up and down in value in the short/medium term , but in the long term it should go up  more than inflation based on long historical statistics. We are not talking here about buying and selling shares everyday like some kind of City broker , but regular investment into mainstream funds that hold a lot of different shares and other things . The risk of collapse as you put it , is very small , as long as you stick to mainstream investment funds. Here are a couple of links to look at .
Investing in stocks for beginners: how to get started - MSE (moneysavingexpert.com)
Investing for beginners: Why do we invest? - Monevator
Long-term investing: Increasing your chances of positive returns (nutmeg.com)
This company is often recommended for Junior ISA's as they do not charge for them ( although as always the investment fund(s) you pick will have a charge ) Also they have an explainer video.
Junior ISA | Invest in a Junior Stocks and Shares ISA | Fidelity

NewToDadding

I was considering previous metals as I didn't know about S&S JISA.
After all of your suggestions I think my best option is just that.
I'm going to take a good look at Fidelity and go for a safe ish bet like Vanguard. 

Thanks to everyone who has contributed advice and suggestions this far. 

Albermarle

Fidelity offer their own multi asset funds (Fidelity multi asset allocator), which are very similar to Vanguard, but less of a UK%.
 
Also similar and often recommended are HSBC global strategy funds .
All of them are available on the Fidelity platform , so can be used within the Fidelity JISA.

NewToDadding

Would you recommend them over Vanguard? 

Albermarle

NewToDadding said:

Would you recommend them over Vanguard? 

As this would constitute a kind of financial advice , then the forum tends to steer away from specific recommendations .
Anyway when I reread your post you just said 'Vanguard ' and I jumped to the conclusion that you meant the Life Strategy funds ( as they are mentioned a lot on here ) whereas of course Vanguard have many other funds , so the alternatives I mentioned may not be relevant .
I can only say Fidelity and HSBC are huge global financial companies , like Vanguard, so in that respect they are all very mainstream .