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Fergus answers your money questions

19 May 10 08:06 GMT

I'm Fergus Muirhead and I'm trying to answer any money or consumer problems you may be facing at the moment.

You can contact me by e-mail at fergus@bbc.co.uk

I will deal with a selection of your e-mails every second Wednesday on lunchtime Reporting Scotland, Scotland Live and on the BBC Scotland news website.

I also have a consumer page on Twitter: http://twitter.com/consumerstuff

Q. I have been putting aside a small amount of money each month for my granddaughter, who is now 11-years-old. I would like to invest £500 for the next five years so that it will make a bit more interest than sitting in a savings account. Any ideas which is the best bank to invest in? Joyce Mathers

A. It might be that rather than putting the money directly into a bank account you should look at investing via a Child Trust Fund. This is a long term savings account set up for children born after 1 September 2002. Parents, family and friends can invest up to £1,200 a year into a variety of different accounts and funds and not pay tax on any of the gains. You can find much more detailed information on this investment at www.childtrustfund.gov.uk

Q. There is an organisation (not a bank) to which people can lend money at a decent rate of interest and which then lends money at a lower rate of interest than the banks to people with a good credit rating. What is its name and address? Ian Petrie

A. I think that you might be talking about a credit union. The following quote is from the website of the Scottish League of Credit Unions and explains their philosophy. "A credit union is a co-operative financial institution that is privately owned and controlled by its members. Credit unions differ from banks and other financial institutions in that the members who have accounts in the credit union are the owners of the credit union and they elect their board of directors in a democratic one person-one vote system regardless of the amount of money invested in the credit union. The credit union's history is the foundation of the Scottish League of Credit Unions philosophy: that everyone deserves an opportunity to achieve financial wellbeing, that working together, cooperatively, works for the good of all and that giving back to communities is a key rationale for profitable operations." You can find out more about your local credit union from the SLCU website at http://www.scottishcu.org

Q. My wife and I are both retired, ages are 65 and 68 respectively. Last week we cashed in our stock market ISAs which we have had for many years as we felt that the way the market has been we should be in something safer. We received a cheque for about £80,000 which we now need to invest preferably for two or three years. Looking around, the best and safest option seems to be the two Indian banks, we have already taken out this year's ISA allowance. Any ideas on where we should invest this money? Doug and Elly McPherson

A. It's interesting that you decided to get out of the market now. I am presuming that you did so with a profit. The market has been volatile recently and there are many who think it will be flat right through the summer, so perhaps now is not a bad time to be taking your profit. You mention the two Indian banks and they have certainly featured in a number of top lists recently. I think that you need to be looking at one of the money supermarket websites such as www.moneysupermarket.com or www.moneyfacts.co.uk remembering that it is not just the rate of interest you are offered that is important. You also need to consider the penalty for any withdrawals during the notice period and the ease of access to your account if it is internet-based.

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