Best way to invest £2K

[bendmeoverbackwards]

I have recently found out that my 14 year old dd has been dipping into her savings to spend on clothes. She gets a monthly allowance which I am happy for her do as she likes with.

The savings account is with a bank and is instant access. Interest rates are very low but better than nothing.

I'd like to put the money into a longer term investment that will earn a bit and which she can't have access to until she's 18.

Any ideas where I can do this?

Are you happy to risk the capital or do you just want to stop it turning into the contents of Primark and then the rag bag?

If she's 14, investing could be a little short term considering she could be 18 in little over 3 years.

A post covid recession could mean the markets are down compared with now so if she needed the money for university or a car it could be worth less than now, even before the effects of inflation.

Oh bugger, that doesn't sound like good news!

I don't want to risk the capital, just stop her having access to it! And perhaps earn a little interest.

Premium bonds probably your best bet op

Potentially premium bonds through ns&i.
Now managed through an online holder account, they are very easy to buy but less so to liquidate (keep that as note to self for the point you need them). Unfortunately it seems really difficult to buy and do more on behalf of a child but that itself could be quite protective, given that it would not be all that long before control would have to pass over to her, if you opened the initial account. It is also not too bad to buy new ones with quite low amounts when you have spare to bung into savings. The rates are not brilliant but there is the chance to win, which should be thought about as a better interest rate over the 3-4 years rather than a win.

And make sure you tick the box that says reinvest any winnings.

Premium bonds are a great idea! I have quite a few myself bought by my mum when I was younger. And yes I have prizes reinvested.

@Ormally why are they difficult to liquidate? What's the process?

You cash them in through the website, which if they are yours, takes a few days but is reasonably easy and is a click and confirm process. I mean there are more layers to hold back temptation than instant access. Although I am the holder for myself and an under-16's (2 different account numbers on my profile), I can't change anything on the under-16's, even the way any prizes are paid or reinvested. I think I also tried to buy more and add to the current sum the way I would for myself, and can't do so. When a certain type of account matured on the u-16's, I had to receive about £30 back because of not being able to figure out or receive any description of how to just reinvest in more bonds which would have been my preference. Essentially it seems I can only see but not change that profile, presumably until it passes to the young person.

Can she open a JISA? Coventry interest rate was over 3% last year for my DDs.

cash ISA or Junior ISA would probably be the best option.

Another vote for a junior cash ISA. Coventry building society now down to 2.25 but that's still shedloads more than the 0.1% my adult national savings are going to get this year.

Educate yourself first and then teach them about crypto- it will be a lot more common when she's older. Invest some into ETH and BTC.

@Bigbubbles100

Educate yourself first and then teach them about crypto- it will be a lot more common when she's older. Invest some into ETH and BTC.

Lol do not do this.

Get a junior ISA with a decent interest rate or premium bonds!

Premium bonds would likely only earn you £50-75 over the next four years. Money Saving Expert have details of junior ISAs paying up to 2.5%.