I wouldn't bother with premium bonds. As you say, you may not ever win. With a normal savings account at least you are sure of getting some kind of interest.
You can't open an ISA on behalf of a child. You have to be over 16 to open an ISA.
I have a child's account for dd. It is in my name on behalf of her: 'Mrs T Squirrel re Hazel Squirrel'. Most of the banks and building societies do children's savings accounts of various kinds. You might want to see what your bank are offering. Or have a look at Money Saving Expert for their list of current deals.