What's a good investment for newborn children?

My grandaughter will be hatched just before Christmas. I'd like to invest some money for her for later in her life. I'm not really up on finance. Any ideas? Thank you.

Have you heard of Child Trust Funds? - This is a children's savings scheme set up by the government back in 2005, there's even a pot of money your son/daughter will be entitled to for the little one.

Type 'child trust fund savings' into Google and you should get all the info you need.

I like the idea of premium bonds, there's always the chance she could win loads more, you can add to it over time, it's completely safe and you can withdraw at any time. www.nsandi.co.uk or .com I think

I have always liked the idea of bonds. They take time to mature, but by the time the baby is 18 they will be fully matured and worth so much more than what you bought them for.

another idea is a CD at a bank. but it depends on how much you are willing to invest. The more you invest, the higher the interest rate is.

We buy our grandson's premium bonds at Christmas and birthdays, with a small gift so they have something to open. It will never be mega bucks but the thought is nice and there is always that little chance of a win!

Yes, I bought my two National Savings & Investment Childrens Bonus Bonds - great tax free interest rate and cast iron long term investment, which you can buy more of if you want over the years. You have to buy them and name the parents as you are not allowed to hold them yourself. I assume this is in case people try to use them as a tax dodge. I have a another granchild due next year so am saving-up for that one too.

I really like strip bonds. http://stripbonds.info/

You're basically buying a bond "stripped" of interest payments. So you're investing in receiving $X in whatever time frame you want.

I'd suggest looking at government strip bonds. They're relatively stable, but still their value will fluctuate if interest rates change.

SIPP (Personal Pension fund) .. as soon as she was born she was entitled to start reclaiming tax on her pension contributions.

If she has no taxable income, she is limited to maximum contribution of 拢2808 per year (to which the SIPP provider adds 22% (current year) from the Tax man, making a fund of 拢3600)

From next year the basic rate drops to 20% so (assuming the 拢3600 limit still applies) she will have to put in 拢2880...

Assuming the fund grows at 4% above inflation, then by the time she retires at 65 her fund will be worth over 拢1 million ... (actually 拢1,061,886 - and she would have put in a total of 拢187,000)

If she WAITS until age 20 before starting (and contribues at exactly the same rate) at 65 her fund will be worth LESS THAN HALF a million (actually 拢435,705) - for a cost of 拢129,600.

If she STOPS contributions at age 20, at 65 her fund will be worth MORE THAN HALF a million .. (actually 拢625,000) - for a cost of 拢57,528 ...

In other words, contributing LESS THAN half the funds for the
FIRST 20 years is worth more than DOUBLE the next 45 years put together ..


NB = what if she put the same money in an ISA and earned the same 4% over inflation ??

Well at 65, her ISA would be worth 拢848,622 .. i.e. some 拢213,000 LESS. ...

Oh ho you say - but Pensions are Taxed ..

Yep = so she takes her 25% lump sum (25% of 拢1,061,886 = 拢265,221 .. leaving approx 拢795k .. if we assume this is Taxed at 拢20%, Tax costs her 拢159,132 .. (拢213k - 159k = 54k) .. so she is still approx 拢54,000 better off with the pension.

why not invest in the ISA or a mini ISA. or open a account in the building society , and if you do open an account in one of these be sure to be a guarantor so if granddaughter's parents split they do not get their hands on it . you can also buy shares that way you can get dividends on the company.
good luck and congs,

buy them CD or fund

I don't know if American Century still has their gift trust fund, but I would check that out. Historically, it had a ver decent return +12%.