To stay or leave this investment fund (childrens fund)

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Sman19

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Hi, I am looking to invest childs allowance from the age of 0 to ~20 (150euro/month) to have a nice pot when they are older. Can someone advise on the best investment fund on the market at the moment for this i.e. lowest charges and most respected. I went with irish life MAPS 4 but thinking of backing out based on figures for projected expenses and charges estimated over the course of its life. See information noted at bottom.

1. Each payment is subject to 1% gov levy
2. Managament fee by irish life is 1.8% annually
3. 5% increase due to CPI year on year
4. Tax on gains made at end of 20 years.

I guess what I am saying is does this fund seem sensible to you guys. 'How to be good with money - Eoin McGee' recently had an episode discussing this exact strategy but they obviously didnt mention the chosen investment fund. Any feedback would be appreciated so I could either leave what I have set up or pull out of this before the cooling off contract period passes.


Note:

After 1 year, total premium paid to policy would be 1800euro. Projected investment growth on that 39euro. However, projected expenses and charges on that 108euro, and taxation of 0euro. Policy value after year one 1731euro

After 5 years, total premium paid to policy would be 9946euro (includes increase due to CPI). Projected investment growth of 1022uro. However, projected expenses and charges on that 451euro, and taxation of 234euro. Policy value after year 5, 10283euro

After 10 years, total premium paid to policy would be 22640euro (includes increase due to CPI). Projected investment growth of 4628euro. However, projected expenses and charges on that 2100euro, and taxation of 1036euro. Policy value after year 10, 24132euro

After 20 years, total premium paid to policy would be 59519euro (includes increase due to CPI). Projected investment growth of 23346euro. However, projected expenses and charges on that 10660euro, and taxation of 5201euro. Policy value after year 20, 67004euro
 
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Thanks for your reply. I weighed up the options of building the money in a secure savings scheme however there is little interest gained. I joined the first investment fund I could find assuming given my level of risk (medium-high) there should be gains – (possible naivety), but looking now at fees etc. over the investment lifetime I am not sure this is the right choice.
 
Might be an idea to get a few months savings together and buy a few stocks every 6 months. Otherwise, you're fairly screwed at the moment. Interest rates are very low and staying that way for a while in my opinion.
 
If I am not mistaken there is tax due every 8 years under deemed disposal (I don't know much about the MAPS product but believe it would fall into this category)
 
Do you have a mortgage? If so, make sure you're on the best rate possible. Should be approx 3%.
Then overpay your mortgage by as much as you can afford. It's a guaranteed tax free 3% return with zero fees.
 
Yes I think it is subject to tax also as stated gravitygirl.

No mortgage as of yet lledlledlled. Thanks for the advice, I am going to pull out of this fund and keep it in savings
 
I take it you are renting then?
Would your priority not be to save for a deposit to buy a home, and then start looking a nice pots for kids when they are older?
 
Yes renting at the moment, we have total savings of approx 45K. With regards buying a home, we are actively looking but hesitant on what we can see out there at the moment for the mortgage we can get of approx 280K. Given that we are getting children's allowance now, I was hoping to save/invest this from day dot (in the best means possible) to ensure we have a nice pot for them. I take your point above regarding mortgage rate etc.
 
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