Are funds deposited in the name of the grandfather for the benefit of his minor grandchildren considered a gift, and is it permissible for the parents to dispose of them immediately for the children's benefit, or do they remain held in the bank until they reach maturity?

The bank is considered trustworthy, and the guardian of the minors (the father) is permitted to take from the money for expenditure or investment. If the bank refuses to hand over the funds, the matter should be referred to a judge. What the grandfather did constitutes a bequest, because he explicitly stated his intention to do so to retain control over the money during his lifetime, and for it to become the property of the minors after his death.