investment for kids' future

[louise jones]

I want to put �5,000 each away for my three daughters, what is the best type of account/fund/bonds etc to put it?

They will not be allowed to touch it until their 18th birthday - one is 14, one is 12 and one is 8 now.

[Hammer]

For a long term investment such as this, past history would suggest that you would be wise to take a higher risk to earn a higher return. Cash investments (eg savings accounts) are low risk and give relatively low returns. Fixed interest bonds are slightly higher risk but should give higher returns over the long run. Equityes (ie shares) are the highest risk, but over the longer term, particularly for the youngest child, should give you better returns.

I would say fixed interest for the 14 yr old, either fixed interest or equities (or a mixture) for the 12 yr old and equities for the 8 yr old. Just my opinion though.

For tax efficiency, you could also put it in their own name so they pay no tax. Have a look here for some more ideas.