Investments or savings for DD?

[Rollermum]

I am entirely clueless about money and investments. Have recently had a baby and her Grandma said she will be giving her money each birthday and Christmas and we should set up a specific account.

She recommended premium bonds (I think that what they are called) but my understanding is you need a chunk of money to start with and you may not ever 'win'?

So I was wondering about savings or an ISA but not sure of the implications of either.

We are not talking huge sums - I'd imagine under £50 twice a year. We could add to it ourselves possibly in future too. It doesn't need to be quickly accessible.

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.