£5K in premium bonds for 11 yo-is it a good idea?

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DS has £5000 to save somewhere. He already has a savings account with the maximum in it that he can access once 18, plus an ISA opened this year with the maximum £9,000. I wondered if premium bonds might be a good idea! He will receive a considerable sum when he’s 21 from something else. The money is currently sat in a child current account. I don’t want to go down the stocks and shares route.

Forgot to add: if you have a similar amount of premium bonds do you ever win and if so how much? My Nana was always winning £50 here and there but i don’t know how much she invested.

Maybe leave it in premium bonds for now then transfer it in to the junior ISA in April when ISA limit renews. Is it in a cash ISA or stocks and shares ISA. As he won't turn 18 for another 7 years I would be putting it in the junior ISA in a global etf to give it the best chance of growing by 18

https://www.moneysavingexpert.com/savings/premium-bonds-calculator/

This link lets you work out your likely annual winnings with average luck for different amounts and compare it to what you could get in savings.

Any reason you have ruled out shares?

investing for a minimum 7 year period you’ll maybe get one £50 win from premium bonds. Are you happy with that? You’ll get much better return from stocks and shares. Why have you ruled this out?

It depends when he needs it. If this is money he's not going to touch for years, then I'd just pop it in a high interest account (generally better returns than premium bonds, esp if you're not paying tax on interest), then move it to a stocks and shares ISA in April.

I don’t see much point in putting it in premium bonds as he’s not a tax payer and that’s the main reason for PB’s as they are tax free. I would add to a standard savings account and then transfer to an ISA in April. Curious as to why you don’t want to go down the S&S route. Returns will almost certainly be considerably higher and will have the added benefit of teaching him about investing. I wish I’d had the chance to learn as a child and not in my thirties, I’d be considerably wealthier now.

My DC both have around 5k each in PBs. I just checked on the app and in the past 6 months, one has won £125 and the other £175. They do usually get £25 or £50 each month, but obviously can end up going a few months without anything.

My kid has £5k in Pb, won £200 so far since jan

Is is random luck though

If he is an only child maybe but investing would be better in index funds .even Cash ISA is a better return than PB
If he has siblings absolutely not as if he wins say 5000 k and his siblings 50 you can't even it up by transferring 2500. It's his and it would give rise to a sense of deep unfairness and resentment and possibly effect the relationship of the siblings as you can't guarantee fairness or equality it's not like one child worked harder one was luckier and now has several thousand more

He’s not an only child but he is the only child with this money due to inheritance from someone totally unrelated to the other dc. The other dc should inherit well at a later date from their relatives. Both will be/are adults.

Honestly? Id leave it where it is for 6 months, then put it into a S&S JISA in April.

We have premium bonds, but max out ISA investments before topping up PB.

I have 4.5k in previous years i won around £150-£175 in total two years on the bounce. I haven’t won anything for 15 months. I dont add to it: winnings are reinvested. This is more winnings than a pp suggested though. It’s the luck of the draw. There is a fun thread on here where wins and losses are discussed each month.

It’s an emergency kind of fund for me but i have savings elsewhere too. Honestly id find an account with guaranteed interest in this situation tbh.

When I had £15-20k plus in PB, I would win pretty much every month. Below that figure, I think sticking it in a high interest account until the new tax year would be a better bet, even if it's just to beat inflation, which isn't going down sadly.

I second the suggestion of S&S ISAs for 5 years plus investments. Generally much better returns than Cash ISAs.

If you’d put 5k into the stock market 25 years ago you’d have 45k now. Put it in a low cost all world ETF and leave it.

Repeat after me slowly, premium bonds are not sensible saving. They are safe gambling.

Put it in a child trust fund in small cap and global companies and if it’s anything like my daughter‘s money from that age, by the time this kid is 18, it will have gone up nine times in value

Is put it into premium bonds for now, then on an ISA in the new tax year.

One reason to leave in premium bonds might be control. The adult controls the premium bonds account until 16. Most savings bank accounts are online these days and seem designed for the child to control them.

Premium Bonds are too hit and miss. Best to maximise guaranteed interest.

Personally i think PBs are only worth it once you have totally maxed out tax free savings and presume your DS isn't anywhere near that.

As for winnings, I have the full holding and the most I've ever 'won' was £300, since April this year I've had 3 months where I 'won' heehaw.

I would only do premium bonds if necessary for tax reasons, then move to a S&S ISA. Find the right funds and that £5k could grow very nicely by the time the child is 18. I have £50k in premium bonds currently (only due to tax reasons, all ISAs maxed out) and won £0 this month (I usually get something though! Last month was £50). It's not a great investment in my opinion.

Thank you. Can anyone recommend a S&S ISA please?

There are 2 parts to this. The broker where the account is held and then the investments you choose.

I have my (adult) stocks and shares ISA with Scottish Widows. As long as you stick to ETFs, shares or gilts rather than funds fees are low and I find the interface easy to use. There are other low cost platforms (eg Trading212) which came along after I had opened my account, but I haven't bothered to transfer. I don't know what any of these platforms are like for junior ISAs.
Moneyvator have a useful table comparing different brokers: https://monevator.com/compare-uk-cheapest-online-brokers/

As he already used the maximum jISA allowance for this year (he doesn't get the adult allowance on top of the child allowance) are you thinking of transferrrng from the cash jISA to a stocks and shares jISA? If so remember to go through the transfer process rather than just withdrawing it and trying to pay in elsewhere.

I personally wouldn't invest in stocks & shares outside a sheltered account, but I'm not any sort of financial advisor, but I think not having to worry about Capital Gains Tax on (hopefully) future gains makes life simpler.

Moneysaving expert has a list of child savings accounts where you could shelter the £5000 til next year https://www.moneysavingexpert.com/savings/child-savings-tax-free/

Another idea would be to invest some in a junior SIPP. Obviously very long term, but you can invest up to £2,880 and the government will top it up by 20% - so free money!

As to what to actually invest in, as I said I'm not a financial advisor or any sort of money expert, but a low cost world tacker would be my choice. Vanguard have just launched a all-cap global tracker ETF. The accumulating version (ie where the dividends are automatically invested) is called Vanguard FTSE Global All-Cap ETF Acc - the ticker is VALL.
Just to say again, I'm no expert and you should always do your own research. Moneysaving Expert and Moneyvator are good places to start.