Investing for children

Getting the right balance

You can save regularly on a monthly basis or with lump sums - and there are various ways you can do this. Building societies and banks offer deposit savings accounts that can be opened by a child or by an adult on a child's behalf. They typically provide easy access and a high level of capital security.

If you're starting early and planning to invest for the next ten or twenty years, it may be worth considering putting some money into the stockmarket. History suggests that over the long term it is one of the best ways to generate wealth. Any stockmarket investment involves risk but over the long term you could expect this to be balanced by the level of return which you may earn.

One of the easiest ways to invest in the stockmarket is through an investment trust where investments are managed by experienced fund managers. Investment trusts can invest in scores and sometimes hundreds of different companies, thus spreading risk across the market at a level unattainable by most individual investors.

Using investment trust saving schemes can be a simple and cost-effective way of buying stocks and shares and is especially useful for regular investment or where small amounts of money are being invested.

Please remember the value of stockmarket investments and the income from them can go down as well as up and you may not get back the amount originally invested.

You may wish to spread your risk and provide your child with a balanced savings portfolio with some money going into bank and building society deposit accounts and some money going into the stockmarket with a view to superior long-term growth potential.



How to invest for a child in SIT