Children's ISA's / long term investments

[mazdajason]

Evening,

My grandma would like to gift roughly £10K to my daughter for her higher / further education needs. Currently my daughter is only 18 months so a while away yet but i'm not overly familiar with savings for children and where the best place would be to put the money. All in one ISA (if that's possible) or park half in bonus bonds, half in an ISA or maybe there's a third option. I'm certain there is, i'm just not familiar with what would be best.

Here's the kicker, the money is currently in New Zealand in NZD so there'd be a hit in FX fees. Maybe it would be best investing it in a bank in NZ? That might be a stretch for the finance people here too but thought it was worth noting as it's likely to be an important note.

[Zstar]

You can put 9k in a Junior ISA at 3.25%

https://www.moneysavingexpert.com/savings/junior-i...

Use someone like TransferWise to save on FX Fees.

I am not an expert but there may be challenges opening up an account in NZ if your daughter is non resident and not a citizen. I also couldn’t find better than 2.4% interest in Rabobank.

[JulianPH]

Zstar said:

You can put 9k in a Junior ISA at 3.25%

https://www.moneysavingexpert.com/savings/junior-i...

Use someone like TransferWise to save on FX Fees.

I am not an expert but there may be challenges opening up an account in NZ if your daughter is non resident and not a citizen. I also couldn’t find better than 2.4% interest in Rabobank.

This is a very good option, but remember the rate is variable.

Jason, congratulations on becoming a father and given the time frame available for this money to grow I would certainly have a look at stocks and shares Junior ISAs (which you can also put £9,000 a year into).

[oldaudi]

Congratulations

Putting money away for children is very rewarding, for me at least. My children are now 13 and 11. What they have saved would put the majority of the adult population to shame. With a longer time frame, higher risks , dividends and compound interest reinvested it really doesn’t take long to get to a decent sum. Adding a just a little a month to the initial invest makes a massive difference if you can do so.

Junior cash ISAs will be a safe bet but I would be more tempted to find a stocks and shares ISA as you’re starting with a very big lump sum. With many stocks and funds rock bottom at the moment I think a carefully chosen portfolio of funds and shares would work wonders over the next 18 years. I’ll let others suggest which funds and shares as my picking isn’t great. We are at a once in a lifetime situation with the markets, having cash to invest now is very fortunate

If you can set it up it might even be an idea to drip feed the money into the funds over time, rather than one lump sum into a portfolio. Helps to cash average

Edited for WonkeyDonkey. Remove pompous comments. I will submit further comments to an editor before publication

Edited by oldaudi on Sunday 31st May 16:43

[mazdajason]

Thank you all for your help.

I have my own stocks and shares ISA with Hargreaves Lansdown so I’ll have a read there for what it would take to open something up for my daughter. I’m sure they have information on their website, admittedly it’s been a while since I used it as I just use the App and I’m sure they’d answer any questions I have too.

I like the idea of splitting it or drip feeding an amount into the stocks and shares to ensure all the risk isn’t in one place.

I think that because it’s for my daughter and it won’t be used / touched for nearly two decades I want it to go to the best place, thanks for your advice gents.

[JulianPH]

You will find all you need for a Junior ISA with HL here:

https://www.hl.co.uk/investment-services/junior-is...

With the best part of two decades ahead then you can take more risk/reward right now and then adjust this as she becomes closer to being able to access it (and if my daughter is anything to go by that will come around in what now feels like a flash!).

[Mr Whippy]

Zstar said:

You can put 9k in a Junior ISA at 3.25%

https://www.moneysavingexpert.com/savings/junior-i...

Use someone like TransferWise to save on FX Fees.

I am not an expert but there may be challenges opening up an account in NZ if your daughter is non resident and not a citizen. I also couldn’t find better than 2.4% interest in Rabobank.

That looks like the best rate going.

But aren’t they locked away until 18 y/o once the money is in?

No chance to use money for private school fees, or driving lessons etc?

[JulianPH]

Mr Whippy said:

But aren’t they locked away until 18 y/o once the money is in?

No chance to use money for private school fees, or driving lessons etc?

Nope. This is for the child. The Bank of Mum & Dad still has to pick up the rest!

[CornishRob]

JulianPH said:

You will find all you need for a Junior ISA with HL here:

https://www.hl.co.uk/investment-services/junior-is...

With the best part of two decades ahead then you can take more risk/reward right now and then adjust this as she becomes closer to being able to access it (and if my daughter is anything to go by that will come around in what now feels like a flash!).

Do IM not do junior ISAs etc?

[JulianPH]

CornishRob said:

JulianPH said:

You will find all you need for a Junior ISA with HL here:

https://www.hl.co.uk/investment-services/junior-is...

With the best part of two decades ahead then you can take more risk/reward right now and then adjust this as she becomes closer to being able to access it (and if my daughter is anything to go by that will come around in what now feels like a flash!).

Do IM not do junior ISAs etc?

Yes we do, Junior ISAs and Junior SIPPs, but the OP expressed an interest in HL so I was just responding to that!

[WonkeyDonkey]

oldaudi said:

My children are now 13 and 11. What they have saved would put the majority of the adult population to shame.

Edited by oldaudi on Saturday 30th May 08:25

I'm sorry but that just sounds ridiculously pompous.

What have your children done to earn this money? What out goings have they had to budget?

Being born with a silver spoon doesn't make you smart with money.

[Mr Whippy]

WonkeyDonkey said:

oldaudi said:

My children are now 13 and 11. What they have saved would put the majority of the adult population to shame.

Edited by oldaudi on Saturday 30th May 08:25

I'm sorry but that just sounds ridiculously pompous.

What have your children done to earn this money? What out goings have they had to budget?

Being born with a silver spoon doesn't make you smart with money.

Arguably the average adult savings after debts is well negative, so a child with 10p would put most adults to shame.

But yeah. Bit weird. Isn’t it vulgar to talk about money if you have money?

Considerably richer than yow!

[Mr Whippy]

JulianPH said:

Mr Whippy said:

But aren’t they locked away until 18 y/o once the money is in?

No chance to use money for private school fees, or driving lessons etc?

Nope. This is for the child. The Bank of Mum & Dad still has to pick up the rest!

So a kids isa can be used before 18?

Genuinely interested as that rate is great, and I’d hammer it with deposits. But I’m not made of money so using it for private education would be a consideration.

After all, you have to spend it at some point...

[JulianPH]

Mr Whippy said:

JulianPH said:

Mr Whippy said:

But aren’t they locked away until 18 y/o once the money is in?

No chance to use money for private school fees, or driving lessons etc?

Nope. This is for the child. The Bank of Mum & Dad still has to pick up the rest!

So a kids isa can be used before 18?

Genuinely interested as that rate is great, and I’d hammer it with deposits. But I’m not made of money so using it for private education would be a consideration.

After all, you have to spend it at some point...

Sorry. The "nope" was for the last part. It is (or rather, becomes) your kid's money (and stops being yours).