If your child had £10,000 where would you put it?

[SourMilkGhyll]

Struggling to work out the best ISA / savings account / soething else? Thing to do with child's money.
G'parents have very generously given dd1 and dd2 £10,000 each.
What do I do with it?
Dd1 and dd2 are 13/14 years old if that makes a difference.
G'parents will expect money to be saved wisely so it can be used towards house / university when dds are oldet.

Cash ISA for most of it ( not sure if lifetime/help to buy are allowed at that age). Small bit like 1 or 2 k in an investment ISA.

Premium bonds. Better rate of return (with luck) than an ISA.

There are sometimes special children's accounts that pay a little extra interest, look on money saving expert or money supermarket.

Anything investment is a risk if they want the money in 4-5 years time for university. Might be a bit short term considering how covid or Brexit might impact the economy over the next few years.

Lifetime ISA pays a bonus but restricts use to pension or house deposit, but might be ok. Most of the time this is the only advantage of an ISA compared with a normal savings account as due to the savings allowance and low interest rates, almost no-one pays tax on savings anyway. If there's a reasonable chance they will end up buying a house and you already have savings to help them at university, or they plan to take another path at 18, this is probably the way to go.

Or you could do a lot worse than premium bonds to be honest and you can get the money back at any time if you change your mind about what you want to do with the money.

However in this case I'd have a think about what you would do if one of them won a lot more than the other. I like the solution that another Mumsnetter mentioned where she told them that one of them had one a lot but she didn't tell them which one it was and she gave them the choice of sharing the money rather than one of them being quite rich and they did agree to do this.

I would save £100 month into Halifax Ref kids saver Pays 4% you can access after 12 months (so not all the money tied up) then if definitely don’t need to access any more money and want it for a house put into cash isa then at 18 I would encourage them to put in 4K a year into cash Lisa it’s then topped up by 1k by government and that money has to be used for house deposit, if at 18 you need it for uni just take it out from cash isa but note the money is theirs to do what they want with you lose control over it at 18..they can hold any money at that point in easy access accounts..

I would not keep it all in cash that's for sure. I would set up a Stocks and Shares ISA and drip feed the money into that (so as to smooth out bumps in the market), with a mix of tracker funds (shares and bonds).

Whilst drip feeding the money into the ISA, I would hold the cash balance either in Premium Bonds (although prize fund is reducing) or a higher interest account (if you can find one).

A long term investment fund...if the child is young.

pension.

anything else just pays half a peanut at the moment. Do the actual sums on £100 a month for a year at 4% - it isn't worth the effort.

I think it really does depend on whether you think that it will need to be used for university, which is only 4/5 years off, or whether you can afford to save it up as a house deposit/longer term investment.

If you're going to need it in 4-5 years, a stocks and shares ISA is no good really. If you can leave it for 7+ years (till 21), then it's a great idea.

Define what the money is for, and go from there.

Another vote for Premium Bonds.

I’d gradually feed it into your own ISA (lowrisk fund). If you decide to use it towards uni costs, then you can pay it out at that point. If it’s mean to be used for a property deposit, then from age 18 I’d gradually feed it into Lifetime ISAs for them to get the government top ups.

Great suggestions. Thanks. Hadn't even considered premium bonds. That might be a good way forward. Good to have a heads up about how to manage winnings.

Don't want to tie it up in a house deposit ISA as it might be needed for education.

Will reseach all the ideas.
Thanks.