Best rates for children

Nickymcp

My children have £10,000 and £15,000 to invest respectively. I do not want to lock their money away until they are 18 so a junior isa isn’t suitable but bank account savings only seem to pay advertised rates on about £3000. What’s the beat thing to do with their money to safeguard it from the current inflation devaluing it?

Daliah

Nickymcp said:

My children have £10,000 and £15,000 to invest respectively. I do not want to lock their money away until they are 18 so a junior isa isn’t suitable but bank account savings only seem to pay advertised rates on about £3000. What’s the beat thing to do with their money to safeguard it from the current inflation devaluing it?

There are no accounts on earth which safeguard you from the inflation we have / are going to have. All you can do is try to limit the damage.

Why can't their money not be locked away until they are 18? How old are they now? What are they planning to spend it on before then? Note, it is their money, you can't spend it on things you like it to be spent on.

For available savings accounts, see https://moneyfacts.co.uk/savings-accounts/childrens-savings-accounts/?quick-links-first=false

eskbanker

Even if it doesn't seem suitable to lock it all away until they reach 18, presumably most or some of it can be kept back in JISAs until then?

xylophone

How old are your children?

What is the source of the money?

Why does it need to be accessible before they are 18?

anonmoose

As eskbanker says you could split the money if they need access to a part of it and keep the rest in a JISA.  The only reason I can think of that a child might need access to a lump sum before 18 is driving lessons/a car at 17.  Most things like uni expenses, house deposit etc would be post 18.

Or are you talking about a cash ISA and mean you don't want to lock into a fixed interest rate and provider?   You can go for variable rate and you are not locked into providers.  We switched from cash JISA to S&S JISA from a different provider with very little fuss.

If you want to protect from inflation you would be looking at S&S Jisa which would depend on your timescales as to how risky that is.  Ours will be held for another 10yrs so it was the right choice for us.

Albermarle

Savings account = Your money is safe but is constantly devalued by inflation. During some periods, like now, quite dramatically so.
Investments = Your money can go up and down in the short/medium term, but long term ( > 10 years ) should have a good chance to beat inflation, but not guaranteed.

It's as simple as this. . To beat inflation you need to take a risk. By holding mainstream diversified investments long term, the risk can be minimised ( but not eliminated) 

History shows that the inflation risk to savings is greater than the investment risk, long term.