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Child Trust Fund Savings Account

A Child Trust Fund savings account is one of the three options available for children with a Child Trust Fund. The Child Trust Fund is an initiative set up by the Government where every child born on or after September 1st 2002 receives a voucher for £250 to invest in a Child Trust Fund. The money cannot be put into a normal account, it must be a Child Trust Fund and all the major banks and building societies now have child trust funds as an investment option. The parent not only has to decide which provider to go with, but also, which type of account to go for – there are three main types:

Savings Accounts
Stakeholder Accounts
Accounts that invest in shares

Child Trust Fund Providers:

Engage Mutual Insurance »

Stakeholder accounts and accounts that invest in shares have the potential to make more money by investing your child's cash, but there is an element of risk involved, so if you don’t want to invest in shares, you could choose a Child Trust Fund savings account. With a Child Trust Fund savings account, any money you invest is secure. For example if you invest £500, your child will get that sum of money back with interest when they turn 18. But, although the money earns interest, it might not grow as much as it would if it was invested in shares and as with all accounts, the provider will charge for the cost of running it. Make sure you look at all the options before deciding which type of Child Trust Fund to go for.