Ask Paul: Best place to save for my grandkids' future?
Q: I am a 65-year-old grandmother who saves small amounts for my grandchildren in Bankwest bonus saver accounts, which currently earn 4.75%.
My eldest granddaughter is turning 15 and will no longer be eligible for this account.
The amount saved will be close to $10,000 and although not a fortune I feel it would be too much to hand to her at this time.
I would like to invest it and possibly add to it for a few more years to come.
Would you be able to suggest alternatives that I could consider? - Dee
A: It really depends how long you want to invest for your grandchildren, Dee.
Over time the returns on shares tend to be higher than on cash in the bank but I do like anyone buying shares to look at a minimum of seven years.
This means your oldest granddaughter would be 22. This is still pretty young.
So I would consider starting a small share portfolio for her. You could easily do this by using a managed share fund. Companies such as Vanguard, Perpetual and Colonial First State, along with many others, offer share funds. You could also use an exchange traded fund (ETF).
I would encourage you to do a bit of reading first. You are likely to find the MoneySmart website a useful source of information.