Money lock-in

By THIS IS MONEY
Updated:

 

MY two sons, who are aged 11 and 13, have inherited £7,700. They both have savings accounts with Nationwide but I want to lock the cash away until they are older and need it for something important. JB, Croydon

Justin Modray at Bestinvest replies: The simplest, and safest option would be to put the money in a high interest savings account.

The Halifax Save4it account currently pays a competitive 5.05% p.a. Assuming your sons have no income from elsewhere they will be non-taxpayers and can receive the interest gross by completing an R85 form.

Another option is to consider a stock market investment. This entails taking some risk as the investment could fall in value. However, if they invest for five to 10 years your sons may enjoy a higher return than with a cash savings account.

A good, well-diversified investment fund you might consider is Jupiter Merlin Growth Portfolio.

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