S&S ISA or 5 Year Fixed Cash ISA

Hal17

I'm looking to give my daughter £20K to put into a ISA as funding towards school fees when my 5 year old granddaughter reaches her 11th birthday. I was looking at Castle Trust Bank, 5 year Fixed Cash ISA at 4.22%. 

I have thought but not seriously considered the Vanguard LifeStrategy 20 fund as an alternative. Has anyone else considered the best options to fund future school fees? Many thanks.

Albermarle

The time scale of when the money will be needed is the most important factor.
It is normally said for anything less than 5 years, you should stick to cash savings.
Over 10 years investing is normally best , with a mixture for between 5 and 10 years.

If you are going to invest, then VLS20 is a very cautious option and may not grow any more than the savings account.

If the Mother is not earning very much or has little savings, she may be better off with a normal ( non ISA) savings account, where you can get a little bit better rate than 4.22%

Hal17

Thanks Albermarle, appreciate your reply. I think I am going with the 5 year fixed cash ISA for this sum of money.

We are trying to achieve a range of options to cover school fees, so a S&S ISA might be suitable for the 5-10 year period that you indicated. Thanks again.