Where should a 16 year old save?

603majo

My 16 year old daughter has around £1300 in inheritance to put into a savings account and I'd like any suggestions as to where or what product would earn her the best interest rate.
She wants to leave the savings in a high interest savings account for the next two years and she would be happy to add a small amount to her savings every month.
What would be the best option for her - any suggestions would be very much appreciated.
Thanks

bye_bye_band_G

At 16 she is entitled to her own tax free ISA. Although she might not be a taxpayer yet, (and in that case any non-ISA account she opened would pay interest tax free), if she leaves it in the ISA wrapper until she is a taxpayer in a few years, it will still still earn tax free interest for her even then, which would be a distinct advantage at that point.
I would look around for a good rate cash ISA, loads of them around at the moment, but some have introductory opening rates which may fall after a year or so. She could then transfer to another provider, still within the ISA wrapper, if she wanted.

Lokolo

Personally I wouldn't do an ISA. Only because she is going to be taking it out in 2 years, which I assume is for university?

I would put it in a high savings account and fill out an R85 form. which means you get tax free savings.

603majo

Thank you both for your suggestions - I'd certainly written off the idea of an ISA because I assumed she had to be 18 to qualify for one.
No she doesn't pay tax at the moment and the money will be used in 2 years toward University expenses so she is unlikely to be a tax payer before the money is withdrawn.
Thanks again for the suggestions - I'll look into the interest rates of both straight away.
Mandie