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How to invest $2.5k for my aunt that she CANNOT TOUCH for 5 years?

J

JMorton6

Senior member
I need one of those investments that cannot be taken out, period. Not by her, not by me, not by the anyone. 🙂 For 5 years minimum with the best interest possible. What are my options?

Update: Ok, so I guess not. 🙂 New question: what's the best place to invest it for 5 years where she will get the most interest?
 
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Jaepheth said:
I believe you're talking about a trust fund

Or possibly a Certificate of Deposit
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Well I've heard there a lot of banks that have these minimum-term investments that you cannot take out until the term is up? I heard you get great interest too.
 
I am not sure that there's any investment that has zero liquidity for its term. Usually you can get out with some penalty.
 
Utility stocks that have 6-10% dividend. Not glamorous, but decent returns. Then lock into a trust.
 
I've seen similar questions asked elsewhere (making sure the money cannot be touched for a period of time). I don't know of any type of investment where you absolutely cannot touch your money no matter what but you can still have it once the period of time has elapsed. There might be a penalty, even a large penalty, but you can still get at it. Or you can invest in a business but there won't be any guarantee that when 5 years is up they will hand you a check.

More interesting to me is why do people look for something like that? It's not like you are trading off a significant guaranteed gain for giving up access to your money. How can anyone know that no matter what, they will never need the money before the time is up?
 
Ok, so I guess not. 🙂 New question: what's the best place to invest it for 5 years where she will get the most interest?
 
Set up a trust. Have the trust purpose be to manage $2500 for your aunt, and to pay the proceeds and principal to her 5 years from trust creation. Whoever you name as trustee (could be you) will have control over the money for the 5 years, and will be obligated to invest it in a reaonable way (check out what your state considers "reasonable").

Good luck.
 
Might as well get a CD with this amount + your requirements. It's not much interest, compared to the market, but it will be safer if she/you need it in 5 years.
 
JMorton6 said:
Money market accounts aren't safe I guess?
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they're safe but are currently "earning" 0.10% annually? Even CD rates are lousy and you'd have to believe interest rates will go back up some point in the future.

If you can stomach potentially losing a chunk of the investment, I'd look into EagleKeeper's suggestion. If safety of principal is important, I'd go with a CD or maybe an inflation-adjusted treasury bond.
 
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