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The Best Ways to Compare Child Trust Funds

The Child Trust Fund (CTF) is a long-termTo find an account which offers the best
savings and investment plan set up by thereturn on investment, compares the best
Government to encourage you to save for yourperforming Stakeholder Child Trust Fund
children's future. Applicable for allaccounts of the last two years and offers
children born after 1 September 2002 andparent reviews of these products. To compare
living in the UK, an initial £250 sum isChild Trust Funds, the return on investment
paid out at birth (£500 if your householdfrom 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 turnsoffer (7.15% from Britannia Building Society)
seven. In addition to the money paid intowhich will yield £287.03 over two years
this account by the Government, you, yourwhile the best performing stakeholder Child
family and friends can contribute up toTrust Fund (Family Investment's Ethical
£1,200 each year. Your children's voucherAccount) 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. Cashinvest 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'syou 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 oroffer the greatest returns also offer the
assets (lifestyling) when your child turnsgreatest risks. However, most experts will
thirteen. The fees for these accounts areagree that over time shares will out perform
limited by the government to no more thancash savings. "It is very important that
1.5% a year. Shares Accounts operateparents and grandparents take a long-term
similarly to the Stakeholder Accounts, butview …. when you compare Child Trust
are not subject to the same governmentFunds" says Tony Vine-Lott, director general
limitations on fee percentages. So which typeof Tax Incentive Savings Association (TISA).
of account is best for you and how can youBen 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 theequities over cash. The markets go up and
highest returns varying from 6-7%. Variousdown and are volatile, but over such a time,
websites compare the interest rates ofit's the best option." Which ever decisions
numerous Cash Child Trust Fund accounts onyou choose, you will still better off than
the market and list which accounts offerthe 25% of parents who choose not to do
introductory bonuses. The only one to be FSAanything at all. Just remember to shop around
regulated, as far as we know, is Stakeholderand compare Child Trust Funds before you act,
and Shares Accounts potentially offer a muchas it will be time well spent. Happy
greater return in comparison to the cashEggNesting!!!
accounts, but with a greater element of risk.



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