What Child Trust Fund is best?

Question

I need to open a CTF account, Is it better to have a stakeholder or non stakeholder? Or is there an alternative place I can place a small regualr amount [£50] a month?

Answer 1

Try this site for advice: www.moneysavingexpert.com

He's got a full guide on CTFs and other ways to invest for your child.

If you have time, also have a look on www.fool.co.uk

They look like someone has been sponsoring them recently, but the guides are still relevant.

Answer 2

A stakeholder account means charges are capped at 1.5% per year, a non stakeholder account means charges are not capped. Up to you, but I chose a stakeholder account for my son.

Your next choice is whether to go for an ordinary savings account or invest in the stockmarket. I chose the stockmarket (via an HSBC fund) because that's likely to get better returns over 18 years. I wouldn't necessarily recommend HSBC but I would recommend a stock market fund. Most CTF providers will allow you to make small regular savings each month up to the annual limit of £1200.

The government runs a site listing all CTF providers, if you google 'child trust fund' you'll find it. It's worth making use of the CTF account as the government is giving your child £250 for free and all gains on the money will be free of tax.

Answer 3

Ah, I spent a lot of time researching this for my baby, born 3 months ago. The only clue I got was that Family Investments was one that stood out because it was actively managed by one of the better fund management companys (New Star Investment). So I put it all in a stakeholder account with Family and topped it up as well.

Answer 4

All banks do a child account where the child doesn't pay any interest on the savings.

I put my sons money in the account where it starts off as shares and gets moved to safer and safer shares the older he gets

You can add the £50 a month to the ctf account but I wouldn't mainly because I wouldn't trust the government to not take money off my son once he is old enough to get it

Answer 5

Dont invest in CTF. (yourself), its a Government Con.
Let the money default into the gv'ment chosen fund, or pick one, any...and LEAVE it.
You Only invest in things YOU controll. This is a government scheme, and They are at liberty to change the goalposts. That is change 18 to 16, or 21, or decide to give procceeds in training vouchers, driving lesson vouchers, University vouchers, etc, at thier will. Or, change the tax position. Your investing in a government Policy. What political Policy will still be the same, in 18 years time?
Put your money in tax efficient regular savings, some for a child, upto the tax limits, the rest in tax efficient savings in your own name. Get higher interest, risk the endowment crisis people have now got. So many people "ask" how can I get high returns, without risking capital! Indeed! How can I date kate moss, without the risk of her saying no?
High return, high risk. Low return, low risk. You decide what medium is! Just putting regular money aside, long term will be enogh, in a safe account.

Answer 6

I am advising you because a child's future is involved.

1. Actively managed funds are designed primarily to provide the highest possible profits for the managers and occasionally, by chance, high profits for speculating investors They are promoted by financial advisers because of high commissions. They have higher charges, but academic research has shown repeatedly, that 80% of them under perform the index trackers. You have been warned.

2. Go for the stake holder type as the government adds 28% to your contributions and also imposes a ceiling on their charges, to protect you.

3. Within that, select the cheapest fund (judged by its TER) and no entry fees, tracking the FTSE All Share index. Currently the cheapest ones are from Fidelity and M&G. Oh, and do let the child have a hope for something big. Buy it a premium bond also (£100).

Answer 7

If you visit the Motley Fool website they can probably help you

www.fool.co.uk