Child Trust Fund

[LisaJ1986]

I've left this a while but i'm sorting out where to pay her voucher into. Ideally i want just a savings account for her.
Is there any banks that anyone can recommend to pay this into? It's so confusing me, not hard though. Lol
There's just so many places that you can pay into i have no idea where to start. So i'd just like people's opinions as to where is good and where to avoid.
Thanks.

 

[xkikix]

Oh good post Lisa! I havent done mine yet and was wondering what to do! I think I might go somewhere like halifax cus thats who we bank with and I want to open an account for him that he can have access to when he's a bit older like 4 so he can save and withdraw to buy stuff.

Places like asda offer george vouchers...

Any other advise appreciated too xxxx

 

[kalia]

Oh good post Lisa! I havent done mine yet and was wondering what to do! I think I might go somewhere like halifax cus thats who we bank with and I want to open an account for him that he can have access to when he's a bit older like 4 so he can save and withdraw to buy stuff.
xxx

Our children won't have access to the money in their trust fund until they are 18. You can put money in but you can't take it out until then. You can move the trust fund from one place to another to get better rates of interest though.

You get three kinds - cash CTF which acts like a savings account (except for not being able to withdraw money until 18, stakeholders CTF and share-based CTF. Share-based is riskier but could end up paying out a lot more (my parents bought £200 of shares for me when I was 7 and I got £2000 for them 18 years later!) Stakeholder is between the other 2 risk-wise but you get charged an annual management fee so they have to do much better than the cash CTF to get the same amount of money.

I'm going to open a cash CTF for DD. Skipton BS are offering 6.25%. Has anyone seen any better offers?

 

[kalia]

I just did the maths and I think in a cash CTF with 6% interest she'd get £750 when she's 18. Maybe the share-based one would be better. The stock market is fairly low at the moment so it's a good time to buy if your looking for a long term investment. If you can change it to a cash CTF at any point in the next 18 years, allowing you to secure the investment when the stock market is high that could make a lot more money.

 

[kalia]

Places like asda offer george vouchers...

Any other advise appreciated too xxxx

Baring in mind the amount of interest that could be made I'd be very wary of anyone offering you a small amount of vouchers to spend with them - it's £25 of vouchers but remember it costs them far less than this to supply the goods and they get the good of your money for 18 years. But I'm just a suspicious person

These types of offers are stakeholder CTFs. You have to pay up to 1.5% per year (but everywhere seems to charge the full 1.5%, which is the maximum they are allowed to) so they would very soon make back the tenner it cost them to give you those vouchers.

I also think my previous maths must be wrong. Asda's website shows a model that says you'd get £1090 pounds after 18 years based on a growth of 7% with annual charges of 1.5%. So that would make a profit of 5.5%. So I must have been way off to estimate £750 based on an interest rate of 6%.

It's so hard!!!!

 

[purple13]

i've got connor's with brittania after taking advice from the moneysavingexpert

 

[Gem & Leland]

what kind did u go for suz ? ive not done lelands yet

 

[1sttimemum]

Ive done a share based one for caitlyn its with the childrens mutual and if you do a direct debit of £10 or more per month, you receive £30 of mothercare vouchers

Altho i think yorkshire building society is doing quite a good rate,

 

[Gem & Leland]

£1000 for 18 years savings tho seems not alot !

 

[purple13]

what kind did u go for suz ? ive not done lelands yet

http://www.britannia.co.uk/c_savings/pr ... /prod.html

i'll switch it in a couple of years if there's something better, when the 7% rate expires.

i've also put additional money in premium bonds in his name...

the £1000 is just the interest accrued on top of the original £250 - i think its expected that parents (other family members, friends) will try to add to that amount.