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