Child investments

[nicename]

So DS is counting his piggy bank. He's up to £500 and counting (he's got more than me).

We set up a child trust fund when he was a baby (with the £250 they were giving out then) and have contributed a little to it over the years.

I was thinking about a junior ISA but seem to remember that you can't have a CTF and and ISA together.

He has a bank account but obviously the interest is pretty poor. Maybe buy some shares?

What do you think?

[evilkitten]

The answer really depends on what you want the money for, and when you will need to access it. You're right that you can't have a CTF and a Junior ISA (although there is a consultation on whether a CTF can be turned into a JISA). So your current options are something like:

Savings account - Easy access, but poor interest (below inflation)
Fixed rate savings - Slightly better rates, money tied up.
CTF - depends on what you've got, but no access until 18.
NS&I Childrens Bonus Bonds - Tend to be quite poor performing. 2.5%, tied up for 5 years. However, they are tax free, so they can make some sense if you're hitting the £100/yr interest problem.
Share based investments - better long term bet, but you'll need more than £500 really.
Stakeholder Pension - for the really far-out planner! No access until 55, but tax relief.

In your position, I'd probably stay with cash, but make sure I'm getting a reasonable rate. The current best buys (according to savings champion) are:

www.savingschampion.co.uk/best-buys/personal/childrens-accounts/#table