Child Trust Funds best to see your child's future grow

07 June 2005
Investing in your child's future with a Child Trust Fund (CTF) could see you almost £7,000 better off over an 18-year term.

This statement comes from price comparison website moneysupermarket.com, which compared children's savings accounts with CTFs to see which offered the best returns.

The website found that an initial investment of £250 with additional payments of £100 per month in a Nationwide BS CTF account with a six per cent AER gave an account value of £40,025.57 after 18 years.

Nationwide's Smart child savings account saw the same investment drop in value to £33,341.34 - a difference of £6,684.22.

"Over a month from launch it has been reported that as a many as 1.25 million CTF vouchers issued have yet to be invested," comments Stuart Glendinning, director of savings at moneysupermarket.com.

"It has to be questioned why - the rates are good, the savings are tax-free and our results show that the returns on investment are better than ordinary savings accounts."

Children's savings accounts do benefit from easy access and are also tax-free as long as parents fill in an R85 form from the Inland Revenue, the website points out, however.

Click here to find out more about children's investments.

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