Children’s savings accounts come in a variety of formats, much like with adult savings, with it possible to get fixed rate bonds, easy access and regular savings accounts that are all designed for children. (There are also Junior ISAs and Child Trust Funds if your child was born between 1.9.02 and 2.1.11, which are discussed elsewhere.)
This is to provide accounts that can meet both short and long-term goals. On the one hand, a grandparent might be looking to put money aside to help a child far in the future, such as helping them raise the deposit on a house or buying a car, in which case a fixed rate bond could be ideal – that way, a lump sum can be invested that can remain untouched for a number of years, though the money may need to be moved when the term of the initial bond concludes.
On the other hand, the child themselves may wish to deposit surplus birthday money in a suitable account until they see something that they wish to buy, in which case an easy access account or perhaps a regular saver would be ideal. Such accounts could also be a great way to get children into the habit of setting money aside and to teach them about the value of saving, particularly if they get to watch their pot grow through the magic of compounding.