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Investing inheritance £ for me and kids

(9 Posts)
GrimmaTheNome Wed 09-Jan-13 13:43:54

Sightly sick laugh at the notion of finding a 'high interest account' at the moment...I don't think there are any. (We similarly have some money from late MIL to salt away)

Can someone enlighten me about Junior ISAs please? I thought the main point of ISAs was that they were a tax-efficient means of saving, so what's the benefit to children as they don't pay tax anyway? confused (Similarly, national savings are - if there is even an issue available at the moment - are less of a good deal for non-taxpayers).

A possible issue with premium bonds is that (AFAIK) they're held for individuals so if you've more than one child what do you do if one wins way more than the other?

nonsense0name Wed 09-Jan-13 13:32:03

Sorry to hear about your Grandfather.

Re: *The money for the kids is to be put into a trust fund until they're 18.*

If the Will stated that a Trust fund should be set up then this would have been part of the executors responsibilities when they divided your Grandfather's estate. If it was simply a wish that the money "be put away until the children are 18" then you can choose what to do with it.

With a relatively small amount of money I would shy away from any type of investment or stocks & shares ISA as your capital (the cash) is at risk. I'd look for a high interest account (not that rates are great a the moment but your money is safe)

A cash ISA for you will mean that you receive your interest at the gross rate (no income tax to pay)

A Junior ISA for the children will mean the money is locked away until the children are 18 and it will then be legally theirs to do with what they please

A Savings Bond or Fixed Rate account will typically ask you to lock away the money for a set period of time in exchange for a higher interest rate. The benefit of these over the Junior ISA is that if you need the money you can still access it (at the end of the period or by foregoing your interest payments).

You can find the best interest rates by looking on a comparison website.

Or you could also consider premium bonds, no risk to your cash but a chance to win a significant amount - you could buy a small number of these for your children and then opt for a high interest account for the rest of the money. I think this is what I would do.

Hope this helps

MamaGeekChic Sat 29-Dec-12 21:18:46

I also have a hargreaves lansdown Junior stocks & shares ISA for DD. Would recommend.

nocake Sat 29-Dec-12 20:53:34

Interest rates are currently terrible, even on long term accounts. They're less than the rate of inflation so you will be losing money in real terms. As you're looking for a long term investment for the kids you should consider a junior ISA and I would opt for a stocks and shares ISA. Have a look at Hargreaves Lansdowne's website for more info (I have no connection to them, other than being a very satisfied customer).

For your money, find the best instant access account you can but don't expect much.

ceeveebee Sat 29-Dec-12 20:51:23

I think if you invest the DCs in junior ISAs then no one will be able to access the funds until they are 18. You can invest £3600 per tax year. Don't think they can have them if they already have child trust funds though

overthemill Sat 29-Dec-12 20:44:34

All savings accounts for children are tax free. Take a look at nationwide I've just opened one for youngest Dd.

hermioneweasley Sat 29-Dec-12 20:44:13

Squirrels - you need to take advice n this.

I am surprised that your GD's estate hasn't specified the trust arrangement for th GCs inheritance.

ATouchOfStuffing Sat 29-Dec-12 20:42:37

I opened an account with Nationwide for DD and as long as I opened a savings account too (with as little as £1 in it for me) then she got 5% (I think) interest as long as it was in there fixed for 3+ years which was the best around a few months back. Perhaps you could put some into an ISA to ensure it is tax free and the rest into a flexible savings account for you (so you can top up your ISA each year) and then set up something like this if they are still doing the offer? I think it was online btw. Hope that helps.

ILikeSquirrels Sat 29-Dec-12 20:23:29

My granddad died in June, leaving me £6k and DS(4) and DD(2) £4k each. The money for the kids is to be put into a trust fund until they're 18. Does anyone have any suggestions of a good place to start? ISA? A high interest account? I really have no idea. As for my money, I want to use some of it for a family holiday next year because we haven't been abroad since the DCs were born, but I'd like to save the rest until we next move house, in the next year or two. What kind of savings account would be best for that? Thanks so much, money matters are neither my nor DH's strong point!

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