"Short" term under 18 Savings / Investment

[UpTheIron]

Hi Folks,

I've been tasked with finding a new home for a chunk of cash (around £10k) as the existing junior savings account is about to revert to a derisory interest rate. Investment horizon is potentially as short as two years, so savings account or cash JISA is what my head is telling me, a quick search I can't find much better than 3.25% (savings) or 3.75 (JISA). No issues with locking the money away for two years in the JISA.

Fast forward two years and it is not expected the lump sum would be required in full but potentially in a draw down model to support university - although in reality the money could be found elsewhere to avoid a fire sale and then repaid later.

In the same situation would you just keep it simple and go for the highest cash/JISA interest rate you could find or would you take on the risk in uncertain times and expand the options to include funds?

For clarity, it's not my child and at the moment the sensible advice and my head is winning.

[dasbimmerowner]

JISA means it's in a JISA wrapper until the child turns 18 if I remember correctly.

So you can't remove it from the that JISA wrapper once it's in there, only shift it to another JISA provider to get a better rate etc.

So from what you describe I'd avoid those.

[Zero7]

If a childs savings (say £30k) go into a kids bank account and it was gifted from a retired grandparent, is it still eligible for tax?

[dasbimmerowner]

Zero7 said:

If a childs savings (say £30k) go into a kids bank account and it was gifted from a retired grandparent, is it still eligible for tax?

IHT gifting rules are such that the grandparent would have to live for 7 years if the gift was greater than the annual £3k IHT free gifting limit.

[NDA]

Tandem Bank have good rates for 12 months... I just put some cash there at 4.5%.

[Mogul]

Money paid into a JISA is effectively locked-in until the child turns 18 whereupon it would automatically be transferred into a regular ISA and could be withdrawn from there..

However, Cash JISA / ISA rates are often worse than the best building soc. savings rates and as there isno’t going to be any tax to pay on the modest amounts in question, there’s not going to be any benefit in considering Cash JISAs IMO.

I’m guessing that it spiny be hard to find a risk-free savings account that will offer 4% pa which may appeal?

[Mogul]

NDA said:

Tandem Bank have good rates for 12 months... I just put some cash there at 4.5%.

I see 4.5% for 60 months, or 4.0% for 12..

[NDA]

Mogul said:

NDA said:

Tandem Bank have good rates for 12 months... I just put some cash there at 4.5%.

I see 4.5% for 60 months, or 4.0% for 12..

I must have just got in before that changed then... I am (as above) 4.5% for 12 months.

[Mogul]

Fair dos.

Atom offering 4.25% over 12 months presently.

[Zero7]

NDA said:

Tandem Bank have good rates for 12 months... I just put some cash there at 4.5%.

These accounts are not for under 18’s though