What savings/investments/bank account for baby

[elise2000]

Afternoon

As of Saturday we have a new addition to the family! I’d like to open some sort of savings accounts for her. Something that can be accessed by us if needed, but more than likely will end up as a car/college/anything else she needs fund for when she turns 18.

Ideally I’d like an account with a rate that is linked to inflation, and doesn’t have an introductory rate which then drops meaning the account has to be renewed every year.

We’d plan on opening it with a lump sum of maybe £10k/£20k then probably depositing a small amount monthly/sporadically.

Could always have two accounts if one locks the money in for a number of years and the other can be accessed.

Any recommendations?

Thanks in advance

[simong800]

I'd put a small amount aside in a normal savings account that you can access if you think there is a portion which may need to be touched.

The rest I'd put in a stocks and Shares ISA in a low cost global index tracker. It can be accessed any time, but I'd be putting it in specifically to not touch as 100% equities should be done with a long timeframe in mind.

Assuming £15k in, £100 a month, 7% annual return by the time little one is 18 it's the best part of £100k. If stocks give 10% a year as they have for the last decade (unlikely but possible) it's £143k. If the money doesn't need to be touched until 25 it's £292k.

The power of compounding! No need to overcomplicate, over a 20 year period a global index tracker will likely (very likely statistically) give better results than chasing round after the latest hot fund.

[BobToc]

Yep, VWRD and forget.

Issue for me has always been worrying about giving kids access to a decent chunk of cash at 18, but that's a risk for us all to judge. I'll be filling up their pensions for a few years as well.

edit: Congratulations!

[elise2000]

Thanks both, sounds like a plan. Will look into it