Premium Bonds

My advice to people who have a bit of money in savings who want the lowest risk possible, is obviously to steer clear of anything to do with the stock market, or any other type of investment where there is no guarantee that you'll get back the amount you invest (insurance, trackers, Investment Vehicles, even property).

My preference are Premium Bonds, which are available by filling out a form on the www.nationalsavings.co.uk website. You can invest up to £30K, each bond is worth £1, and for every 30,000 bonds in existence there is a monthly prize of anything from £50 up to £1M. Statistically therefore if you invest £30K you should get at least £50 a month, which equates to 2% (basically not much worse than an average savings account after you've paid tax, since the "prizes" are tax free).

You can draw out the money at any time therefore it's flexible and you're guaranteed the full amount back, and I think you can set up a direct debit to pay funds in, therefore using it as a primary savings account.

I'm no professional on this, and I'm sure there are higher interest rates available, but the advantage here is that each month you basically play a lottery to win anything up to £1M, so it's a bit of fun! I forgot about mine and last week got £150 cheque!

Also, if you haven't seen it, some good financial info on the net I find is the motley fool website: www.fool.co.uk - you can subscribe for free to their excellent weekly newsletter.