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child trust fund interest rates take a battering
Published: 13/05/2009 |
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TOP CHILD TRUST FUND ACCOUNTS (CASH) NOW
Source: Moneynet.co.uk 13.05.09 TOP CHILD TRUST FUND ACCOUNTS (CASH) 12 MONTHS AGO
Source: Moneynet.co.uk 13.05.09 Child Trust Fund account rates have taken a battering along with the rest of the savings market, particularly over the last 6 months. Last October the average rate on cash based CTF was 6% with the top deal offering a massive 7.75% whereas now the average has slumped to a mere 2.38%. Example of returns possible · If you paid in £30 per month into a cash based CTF account paying 3.0% for the full 18 years, you would end up with £9337 and at a rate of 5% it would be £11430 If you paid in £100 per month into a cash based CTF account paying 3.0% for the full 18 years, you would end up with £29323 and at a rate of 5% it would be £35696. Parents should seriously consider squirreling some money away from the moment they are born in order to give them a head start in later life. Saving, no matter how little, is the key. Of course, with every baby receiving the Government’s £250 voucher – plus another £250 at the age of seven - to be invested in a Child Trust Fund, the initial incentive is already there, but working out where to invest for the best can be a challenge. Cash accounts are safe and simple and an ideal home for your child’s future nest egg if you feel uncomfortable investing in a volatile stock market. Another benefit with a cash CTF is that you are not subject to any annual management fees which can be as high as 1.5% per annum on stakeholder equity products. Whether or not you can afford to top up the voucher with regular sums will make a difference to which is the best CTF for you. If in doubt, ask and independent financial adviser for guidance. There is nothing to stop you switching your cash CTF to a stocks and shares CTF at a later date (or vice versa) however it is wise to seek professional guidance from an IFA to ensure you fully understand, and are comfortable with, the potential risks of share based investments ENDS |
