Th 5 Year State Savings Cert pays 5% in total, which is 0.98% AER
If your timeline is 8 years, and you are considering the above, you should also consider the 10 Year National Solidary Bond and plan an early encashment. The following are the early encashment rates:
This doubles your money in the last three years (so 10% rather than the 5% you'd get from the Savings Cert) and has a further decent upside should you be in the happy position to leave the money site for the additional year or two.
The success of this strategy is predicated on interest rates remaining very low for the term you are talking about. It also offers capital security. There are plenty of options that have the potential to exceed these returns, but most of these do not have capital security.
An option worth looking at for those saving for a childs future (as opposed to investing a capital sum) is another State Savings option, The Instalment Savings product. Save a fixed amount monthly for 12 months, then leave it for a further 5 years. It currently pays 5.5% (.98% AER) at the end of the term (which is six years in total). There is a rollover option at the end of the 12 months and the monthly amount may be altered at rollover. Early encashment is poor. This is more of a savings product than an investment option.
I was faced with this dilemma last year when considering a christening present for a goddaughter. I thought of investing a few thousand but locking it up for such a long time with the potential for pretty poor returns was off-putting. (I had done for another goddaughter's christening over 25 years ago and she got a world tour out of the proceeds the year she was 21, but that was a very different interest/investment rate environment) I thought of splitting it into three or four piles and buying shares in global brands. In the end I gave it to her parents in cash as her contribution to the decoration and fit out of the new house they were just moving into (with the stipulation that it paid for the fit out of her room etc) as a more practical option. No right answer really !