Investments for children

[missprim]

I would like to invest some money for my grandchildren.
Two of them were born in 2006 and both were entitled to the children's trust fund, but when my new grandchild is born, he/she won't get that now.
I'm looking to invest for all three of them with something that they can't access until they are 18yrs old but it has to be safe i.e not shares, and I would like to add to it occasionally but not regularly.
Thanks.

[dasherman]

The new addition could have a Junior ISA.

http://www.moneysavin...ngs/junior-isa#whatis

[bednobs]

in my opinion, childrens isas are rubbish - there's usually not much benefit in having tax free savings as most children don't make enough interest to pay tax on it anyway. If circumstances change at all over the next 18 years, you can't access the money under any circumstances as it belongs to the child the moment it goes in the account. There is also no discretion over when they get it - it's their 18th birthday (so for example if they needed it when they were 17 tough luck, or if they are feckless at 18 there's nothing to stop them receiving the money and going out and spending it all on cocaine, or a tattoo or a Fosters up holiday)
What about getting some premium bonds for them? or just a regular savings account that you can add to?
i have just opened a children's savings account for my daughter with lloyds and it's currently paying 3%, and i retain control of it, so if we needed the money i could get to it

[factor-fiction]

Although children don't usually earn anywhere near enough to pay tax, you need to bear in minds that you invest in something other than a tax-free account the parent needs to pay tax on any interest over £100 a year. Once the account balance reaches a few thousand pounds the interest may exceed this threshold and be taxable

[missprim]

I don't want anything that can be withdrawn before they are 18.
What they spend it on then is up to them, but I don't want to get them premium bonds as I really think you have to own an awful lot of them to be in with a chance of winning anything so I would rather they get some interest from something.
My two eldest grandchildren can't have a junior ISA as they got the children's trust fund and I did want them all to have the same thing.

[1eyedjack]

@factor30
I think you willl find that the £100 limit only applies to parental settlements. Here we have a grandparent investing for grandchildren. Should be safe, although there are dangers if the funds get mixed up with other funds provided by the middle generation.

[1eyedjack]

Not that it is necessarily the way forward, I have known of grandparents investing in accounts nominally in their (grandparents') name but held as bare trustees for the grandchildren, absolute ownership passing on their 18th birthday. I have also known them to set up accounts in the grandchildren's name and simply not tell them about it until they reach 18. What they don't know about I suppose they can't draw on. Not something I would do personally, but it certainly cuts out some of the admin costs when it works.

[spotit3]

Regular money can also be saved in any of the credit unions. I was very pleased today to discover they paid out 5% dividend last year. Definitely well above the banks interest rates.