£3000 for Child to invest

funkmaster_2

Please explain. Thanks. I have no idea what you mean sorry.

dunstonh

You have commented on savings accounts or things of that ilk. These are designed for short term money. You havent said how long the money is going to be held but lets say age 18, thats 13 years. 13 years is long enough to consider higher risk investments.

Higher risk doesnt mean sticking it all in latin american funds. It can mean just increasing the risk a little to look at other investments. Be this index linked gilts, corporate bonds or commercial property funds at the lower end right up to latin american, eastern european funds or china at the other end. Or something in between.

Traditionally, equity based investments are more volatile (go up and down) in the short term but the longer you leave it, the better they become.

Now, you have to be happy with what you invest in but sticking money in premium bonds which on average wont perform better than inflation or a savings account at 4.5% which barely keeps in touch with inflation may not be a safe option in the long term either.

Risk is not an on/off situation. its a sliding scale and you have to pick where you are comfortable and invest accordingly. That can mean introducing some of the funds into a higher risk profile than you currently have.