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Trust funds

(3 Posts)
FrillyMilly Mon 10-Oct-11 18:26:38

DD is 3 so has a child trust fund with the £250 from the government. We have been paying in a set amount each year. I'm now expecting DC2 and would like to make an investment for them also.

What is an alternative to what was the child trust funds? Or can I move DDs money in to another sort of investment such as premium bonds? I want them to both get roughly the same at a set age.

CogitoErgoSometimes Tue 11-Oct-11 10:14:36

A new product that is out, I think, November 1st is the Junior ISA. The limit on how much you can invest is higher than the CTF but you need to shop around to get the best deal - low charges and good interest.

As far as I know, you can't transfer the money out of the existing CTF because it's held 'in trust' on behalf of the child until they reach 18. But check with your provider what options are available. BTW... don't recommend premium bonds as the returns are very poor.

HonestlyBanking Wed 12-Oct-11 11:18:46

The money is in the trust until they are 18. Many CTF's have performed poorly, this is partly due to the high charges - they mostly charge 1.5% - the maximum allowed under the regulations. They then invest in expensive funds with high portfolio turnovers. They are a nice little BIG earner for the banks.....

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