| The Child Trust Fund (CTF) is a long-term savings | | | | greater element of risk. To find an account which |
| and investment plan set up by the Government | | | | offers the best return on investment, compares |
| to encourage you to save for your children's | | | | the best performing Stakeholder Child Trust Fund |
| future. Applicable for all children born after 1 | | | | accounts of the last two years and offers parent |
| September 2002 and living in the UK, an initial | | | | reviews of these products. To compare Child |
| £250 sum is paid out at birth (£500 if | | | | Trust Funds, the return on investment from cash |
| your household income is below | | | | and shares differs widely. Compare £250 in |
| £14,495)xfollowed by an additional £250 | | | | the best cash savings account on offer (7.15% |
| when your child turns seven. In addition to the | | | | from Britannia Building Society) which will yield |
| money paid into this account by the Government, | | | | £287.03 over two years while the best |
| you, your family and friends can contribute up to | | | | performing stakeholder Child Trust Fund (Family |
| £1,200 each year. Your children's voucher | | | | Investment's Ethical Account) will see this money |
| can be invested in one of three types of | | | | grow to £377.70, a 25% higher return. If |
| accounts: Cash, Stakeholder or Shares. Cash | | | | you invest the maximum annual allowance of |
| Accounts operate much like savings accounts, | | | | £1,200 in this stakeholder account, your |
| with interest earned on the sum invested. | | | | investment can be worth £1,812.96. When |
| Stakeholder Accounts invest your children's | | | | you compare your children's Child Trust Fund |
| money in shares from a variety of companies, | | | | accounts, it is worth noting that funds which offer |
| moving the money to lower risk investments or | | | | the greatest returns also offer the greatest risks. |
| assets (lifestyling) when your child turns thirteen. | | | | However, most experts will agree that over time |
| The fees for these accounts are limited by the | | | | shares will out perform cash savings. "It is very |
| government to no more than 1.5% a year. | | | | important that parents and grandparents take a |
| Shares Accounts operate similarly to the | | | | long-term view …. when you compare |
| Stakeholder Accounts, but are not subject to the | | | | Child Trust Funds" says Tony Vine-Lott, director |
| same government limitations on fee percentages. | | | | general of Tax Incentive Savings Association |
| So which type of account is best for you and | | | | (TISA). Ben Yearsley of independent financial |
| how can you best compare Child Trust Funds? | | | | adviser (IFA) Hargreaves Lansdown. "I would back |
| The lower risk option is a cash account with the | | | | equities over cash. The markets go up and down |
| highest returns varying from 6-7%. Various | | | | and are volatile, but over such a time, it's the best |
| websites compare the interest rates of numerous | | | | option." Which ever decisions you choose, you will |
| Cash Child Trust Fund accounts on the market | | | | still better off than the 25% of parents who |
| and list which accounts offer introductory | | | | choose not to do anything at all. Just remember |
| bonuses. The only one to be FSA regulated, as | | | | to shop around and compare Child Trust Funds |
| far as we know, is Stakeholder and Shares | | | | before you act, as it will be time well spent. |
| Accounts potentially offer a much greater return | | | | Happy EggNesting!!! |
| in comparison to the cash accounts, but with a | | | | |