Investment for a 15 year old

[Deleted User]

Saving £6500 for 3 years in an ISA paying, lets say 6.25% AER would return £7796.51

Saving £6500 for 3 years in a bond paying, lets say 7.00% AER would return £7962.78

£166.27 more.

martinman3 wrote: »

Though I should add for completeness that if her daughter earns enough to pay tax before the fixed rate ends, the interest would need to be taxed and an ISA would be a better choice from then on.

Very good point.

mr_rush wrote: »

I think unless there is some extraordinary reason, cash should go into a cash ISA whether you are a taxpayer or not.
- you are psychologically less likely to touch it as its in a tax efficient wrapper.
- it encourages responsible saving
- you will benefit from greater compound interest in the long term

All good points.

I'd personally say if she doesn't think she'll need access to the money in the long term then go for a cash ISA (http://www.moneysavingexpert.com/savings/ISA-guide-savings-without-tax and http://forums.moneysavingexpert.com/showthread.html?t=401374)

Otherwise go for fixed term savings accounts
(http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#fixed and http://www.thisismoney.co.uk/saving-and-banking/best-savings-rate/article.html?in_article_id=431812&in_page_id=50)