I'm so glad that you posted this as my vouchers are due shortly. I was talking to DT2s godmother and she gave me an article from the Telegraph that says that shares are the best way forward. I don't have a clue and so I'm hoping that some very wise mnetters can give you and I some very good advice.
I haven't had dd2's voucher yet, but hopefully will soon.
For seriously good, impartial advice on saving and investing for children, check out The Motley Fool's Investing for Children section. They also have a discussion board on the same topic, where you can read other people's queries and post some of your own.
To summarise the line they tend to take: over a long period of time (10-15 years+) it is very likely that shares will outperform cash-based investments such as savings accounts. A cheap and easy way into shares is through so-called index trackers, which are funds that buy a basket of shares that make up the most popular indexes of the UK stockmarket -- either the FTSE100 (the 100 biggest shares -- vodafone, glaxo, HSBC etc etc) or the FTSE all-share (which has the biggest ones, plus some smaller companies as well).
An index tracker has no fancy upfront fees (avoid anything with an initial fee) and a low annual fee (less than 1%), and the value of your units will simply follow the value of the index up (and down as well, but over the LONG term, it should be up).
HAven't had ds2's yet but will probably put it in the co-op ethical fund - apparently the only 'ethical' one on the market. I'm not absolutist about ethical criteria but do feel uncomfortable investing in tobacco companies and arms related companies in particular. And it makes the choice simpler! But I should read frogs links first I guess...
What I haven't decided is whether to top up the fund or open a different one to put some additional funds in. And what to do for ds1. We haven't really got any dedicated savings for them at present that are separate from our savings.
I've done the deed and applied for a CTF account at HSBC. The reason... well our other accounts are there, it's a huge bank so hopefully won't go bancrupt in the next 20 years and they're international in case we finally do emigrate to Australia
you have to look at the small print - many of them want you to add a regular amount - such as £10 per month. If you just want to put in the voucher and then forget about it there are not many choices.
The problem from my point of view is you can't get the money out until they are 18 and then it goes straight to them. I would prefer to keep our saving s where we can get at them if we need them - say at 16 for something for them.
The Abbey National savings CTF account seems to be one of the best no strings savings account with a pretty good interest rate.
but wasn't the reason for getting good interest rate with abbey that you put in a certain amount per year as well?
What we're probably going to do is save money for BOTH kids in a separate account anyhow. But as we have to used the CT we thought we keep it with HSBC and as far as I can tell it's voluntary whether we pay extra or not. Better read the small print again. Have 10 days to change my mind
Hello - can anyone recommend a good STAKEHOLDER account for a Child Trust Fund ? Anyone a financial expert ?
There is lots of info. and comparison tables on savings accounts on the internet, but as these do not grow as well, I want to go for the share-based STAKEHOLDER account.
From what I have seen the STAKEHOLDER offers from different banks are not very different, so would you simply go with a "name" - i.e go with HSBC because its a huge global bank rather than one you have never heard of (there are a few on the list that provide CTF's that I have never heard of !!) ??
MrsBigD - probably - I looked at loads and got really confused - I thought I had decided the Abbey was one for us (just want to stick the voucher somewhere, no extra) - but that was weeks ago. The vouchers (I have twins) are still sitting by the computer reminding me I should be doing something about them .