Best savings product for £4k for 2 years

[PrinzessinCressida]

I will preface this by saying I know nothing about money at all and I am notoriously obtuse about it, so apologies if any of this is nonsensical.

Since my child was little I've been putting £10 a month into Halifax kid savings accounts. They have now turned 16 and all the savings have moved into an account in my name. There is just over £4,000 in there. I'm thinking it might be a good idea to put that money into some product, like an ISA, where it accrues better interest - the account the money's in now only pays 0.01% and I've heard an ISA might pay up to 5 or 6%.

What would you advise I do with this money. I am happy for it to be locked and untouchable for 2 years, and I don't mind whether I am able to continue adding £10/month to it or not. Thanks in advance.

Have a look at Junior ISA if you want the money to be in your child's name. They have control at age 16 but not access until age 18 at which point you can try to get them to put it in to an ISA. Building societies are often the highest paying for a Cash Junior ISA with rates around 2%. There is also Stocks & Shares version of Junior ISA which you can open on their behalf, this could have bigger returns but it's not guaranteed.

At 16 they can open their own Cash ISA but these tend to have low rates of interest. They cannot open their own Stocks & Shares ISA until they are 18.

They could pay in to a pension - that is a long play thing though and they may want access to the money earlier than when they retire.

So I think I would look towards the JISA and decide if the money is to be invested long term (so S&S JISA which then becomes a S&S ISA when they are 18) or short term using a Cash JISA.

Thank you. I'm thinking no than 2 years, just to bump the total a bit for when they're 18. And it doesn't have to be in their name - I can equally give them the money at the end of the 2 years. Is there a risk of losing any money with any of these options?

Yes there is risk of loss with anything involving Investing.

Only cash products give an interest rate and the capital back.

Investing is for longterm, at least 5 years and ideally longer. So if this is just going to be a 2 year thing, then stick to cash and get as high an interest rate as possible but be aware that it may lose value due to inflation.

Junior ISA until they are 18?
www.moneysavingexpert.com/savings/junior-isa/

Although it seems they can have a JISA and a cash ISA at age 16/17. www.moneysavingexpert.com/savings/junior-isa/#tiplist-6

What a nice nest egg! A cash JISA is your best bet if you don't mind them accessing it at 18, or a normal cash ISA in your name otherwise. Don't put it in stocks and shares for any less than 5 years, as a PP has said.

Just try to get best interest rate. Doesn't need to be a JISA.

Top JISA rate now seems 2.5%.

Thank you all. It sounds like a cash ISA is the way forward.