in terms of a child trust account, which is better, stakeholder a/c, shares a/c or savings alc?.?

Answer 1

A stakeholder account has charges capped at 1.5% per year. All other accounts can charge whatever they want.

A savings account is like a tax free building society account. Your money is totally safe and will grow at approx 5% per year. A shares account is invested in the stock market. Your money might go down, but might go up by a lot more than 5% each year.

I chose a stakeholder shares account. My son is 3, so there's 15 years until he gets the money. The stockmarket might go down for a few years but over a period that long I think it's going to go up by a lot more than 5% a year. There hasn't been any 15 year period where the market ended lower than it started. And I chose a stakeholder account because I couldn't see any reason to pay more than 1.5% if I didn't have to.