How should/could dd invest £10-12k?

[vpillow]

She's 19 and a university student who will fritter it all away if it's too accessible. She may want to access some during her Erasmus year, but we would like her to invest the rest to help towards something else in the future.

I'm thinking, put £5k in Premium Bonds and the rest in some sort of low- to moderate- risk stock market-based scheme.

Any thoughts please?

What would you like her to spend this money on, eventually? I.e. what is sensible and what is not, in your books?

I don't trust banks and don't very much believe in savings, so not well equipped to give advice, but if it were me, I would choose between: 1) flat/house deposit; 2) car/driving license; 3) investment in a start-up or placement opportunity.

If the money has to be saved until later, I would concentrate efforts on choosing a reliable bank, a lot more than finding the 'right product'. You will lose some of the money due to inflation and rising costs of living, whatever you do.

Thanks - 'sensible' spending in my book is a house deposit or car (she has a licence). Definitely not any more shoes or clothes!

remember 'invest' means 'risk losing some or all'. Currently 'save' means 'have it destroyed by inflation'.

most UK banks are covered by the FSCS guarantee, so no need for paranoia up to 85k. If you want 'save' then set up the current accounts; a Club Lloyds will pay 4% on £5k and the rest goes in a Santander 123 at 3%.

I wouldn't put it n stocks and shares, that should be regarded as a long term thing. Not for 2-3 years until she may want a house deposit.

You could look at tying it up in two year bonds if that gets better interest which they often do.

Fixed term bond might be useful, often for three years, though some are for shorter terms.

All fixed rate bonds have lower rates than the current accounts. You can just scrape 3% if you fix for five years.

or 2% on a 3 year fixed ISA.