Where do i put this money?

TCannoyed

We may be about to receive a gift of £10k from my wifes parents. We want to put half of it away for my teenage daughter who is expected to leave school in 5 years.
Where can i deposit £5k no questions asked? Would a savings account be ok?
We both work and are on low incomes so receive tax credits. I pay tax my wife is part time and doesnt.
If i put the money in an account to gain interest how much would it make in 5 years roughly?
Im hoping it wont have to be touched but in an emergency would we or my daughter be able to touch the money. Id rather she didnt have access till shes 18.
Thanks for any advice!

HGLTsuperstar

Split it 50/50 in a mini cash ISA, one for you and one for your wife. Tax-free and no bearing on your income assessed benefits etc, and most give instant access. But by putting it in your names, your daughter wont be able to touch it until you release it to her

HGLTsuperstar

when I say 50/50, I mean out half in your ISA, and half in your wife's

MrChips

I agree with HGLTsuperstar.

You don't sound like you want to take a risk on the stock market, especially if you might have to dip into it in an emergency (and therefore risk having to sell when prices aren't to your advantage).

Therefore, the best low risk return you are going to get is in an ISA which is free from tax. Both you and your wife can save up to £3k each in a mini cash ISA (in any tax year) and get interest tax free. If you have already got an ISA for this year then probably best to get your wife to open a high interest savings account and register to have her interest paid gross as she isn't a tax payer.

You can find the highest paying examples of each account on https://www.moneysupermarket.com, or https://www.moneyfacts.co.uk

I believe the highest paying mini cash ISA at the moment is First Direct at 5.5%, although this drops to a much lower rate in February. I would only go for this account if you can be bothered to move your money around in future. Otherwise just go for the highest account which doesn't pay an artificial bonus for the first few months.

£5k invested in a cash ISA (or split between 2) at an average rate of 5% over the five years should give you (or your daughter) £6381.