Where to put £50k for 16yr Old?

xxxx1971

My stepdaughter is in the fortunate position of being gifted £50k from family (lucky her). She may keep a very small amount right now for some immediate spends (a few hundred), but the majority will be held for either uni purposes or house deposit later in life. Some will be needed from March next year when she turns 17 for car insurance (a contribution, the car is already bought by us), and again at 18.

I've looked at the MSE guidance, but it generally covers small investments (typical for kids) rather than the generous gift she is getting.

Where is best to invest this as most kids savings accounts pay pretty little on this level of sum invested?

Thanks

Brie

Premium bonds?  Relatively easily accessible without being able to get at instantly so can't be used on impulse.  And she might get some nice wins to fund her insurance.

MeteredOut

If it can be locked away (and, indeed, since the money is legally hers to do with what she wants at any time), if you want to ensure it is locked away, you could consider putting some of it  (eg, £30K) into a 2 year fixed rate bond/savings account attracting interest. That can be a great educator on the benefits of saving.

daveyjp

The options at 18 will be wider than 16 (as will her life choices) so for a couple of years I'd just put it in a high rate savings account or as above premium bonds.

Vitor

I'd try a split along these lines - 
1) Junior Stocks and Shares ISA (£9k per year allowed in), locked until age 18 except in exceptional circumstances after which can convert to ISA/Lifetime ISA (LISA) for house deposit. At 16, she'll have many years to track the gains from the market. 
2) £41k in a fixed-term or notice savings, or limited-access accounts if she might dip in occasionally, £9K to top up JISA next April
3) £5K in Premium Bonds for a bit of fun
4) £5K in an Easy Access savings account for car etc.

Since the sum is significant, it’s also worth mentioning the value of basic financial housekeeping, e.g. online scams, keeping her savings in her own name, stock market investing, understanding tax allowances, and eventually having a simple will in place so her wishes are known. 

thegreenone

£500 for her now.
£2500 in a six month saver to pay for 2026 car insurance.
£47000 in a fixed rate saver, hopefully at 4%+ which should realise £1900+ interest ready for 2027 car insurance. 

If she goes to uni but can't take the car, pause the insurance and see if she can insure only when she needs to use it.  Then use the interest money as a monthly top up for her.

eschaton

£45k into a 2 year fix with Atom pays 4.35% or approx £4k. 

There’s also the option for interest to be paid monthly into an external account of £3915. That could be useful for getting access to extra cash. £163 per month income. 

It would also remove or minimise the possible tax hit in 2 years time depending on her income if she gets part time work.