Hello! As you say, there are lots of different options to choose from and it can be a minefield for the unwary. Generally, over the longer term, stockmarket-based investments (unit trusts, shares, bonds, etc.) have tended to outperform deposit-based ones (bank/building society savings) and so offer potentially better returns, but carry with them a higher degree of risk of losing some of your capital. It depends on your attitude to risk and also on how much you are looking to invest. You also need to consider any tax implications. There are schemes such as those usually offered by Friendly Societies where you can invest up to £25 per month and the gains are paid virtually tax free. Also, the government backed National Savings & Investments may be worth considering - Children's Bonus Bonds for example, or Premium Bonds if you think you might get lucky! If you are thinking very long term then you could make contributions to a stakeholder pension scheme for your children although they wouldn't be able to access the money until they reach retirment. My best advice is to consult a financial adviser, who can help guide you through. I can recommend a good practice based in Cheshire (but then I'm biased as I work for them!)