Child trust fund

Debtless_2

Hi all didn't know which forum to ask in so thought this the best place to ask.

which would be the best account to open for the child trust fund with the £250 you get for baby from the goverment, a shares acc or a savings acc?

Lazy_Runner

I am not an expert, but suggest you need to provide a bit more information before people can advise.

Here are three questions thay may help others provide more information:

How old is the child?

What is your attitude towards risk? Are you happy losing some money by the time it is cashed in, or if investing in share, getting less back than if you had put the money in a savings account?

Will you be adding to the account on a monthly or yearly basis?

Debtless_2

oops sorry bought that, child is 1 year old, no risk at all, will be paying some money in every now and then.

dunstonh

There is no CTF with no risk at all. Cash option runs risk of inflation and no real capital growth in real terms. Investment option runs risks of investment returns being more volatile and no guarantee they will out perform cash. Although over 18 years you would think so.

ukdickie31

Shares accounts have risk but the rewards can be much better (no guarantee).

Savings accounts are much more secure but have less growth potential compared to historic share prices.

Nobody knows the future so either is a gamble of sorts.

With the share accounts, consider the fees. As an example, some CTF share accounts charge 1.5% per year. To get the same growth as a basic CTF savings account, they would need to grow at approx 9% a year.

My own CTF account went to a shares account with a yearly charge of 0.5%. I didn't worry too much about the risk as it was an 18 year investment with a managed fund.

Only time will tell.

If your attitude to risk is such that you don't want to have any risk, go for a CTF savings account and check the best buy tables and websites.

Mikeyorks

Read this, it will / should help? In particular read the .pdf which is linked around para 2 :-

http://www.moneysavingexpert.com/savings/child-trust-fund-vouchers

Debtless_2

thanks for that a great help!!