What types of account are available?

Stakeholder accounts

The stakeholder account has various features designed to help put your mind at rest and make your decision easier:

• Reducing risk: Once your child is 13, money in the account starts to be moved from shares to lower risk investments.
• Affordable payments: If you want to add to your child's account, the stakeholder is designed to fit all budgets. Payments can be made from as little as £10
• Capped charges: The total charges are limited to no more than 1.5% a year - that is no more than £1.50 for every £100 in the account

The Family Investments CTF account is a stakeholder account. This is the type of account the government will automatically invest your voucher in if you don't choose your own provider before the voucher expires. Although this doesn't mean that the stakeholder account is suitable for all or that performance is guaranteed.

Please remember that because the stakeholder account invests in shares, its value can fall as well as rise and your child may get back less than has been invested.

Savings accounts

If you do not want to invest in shares, you could choose a savings account for your child. A cash savings CTF is similar to a bank or building society savings account that earns interest (except, like all CTFs, your child cannot access the money until he or she is 18). The money is protected and, as with normal deposit accounts, there are no charges although the provider's costs will be accounted for in the rate of interest they offer.

Money invested in these accounts could still lose value over 18 years in real terms because of inflation and rising prices. For example, £20 won't buy as much today as it did 10 years ago.

Equity accounts

For parents who follow investments such as shares, these types of accounts offer a wider access to more specialist fund types. For example, you might want to invest in the shares of a particular country.

Although, like the stakeholder, this type of account also invests in stocks and shares, it does not have to meet the government's conditions for stakeholder CTFs and there are not such tight restrictions on the type of investments. So charges and minimum additional contributions, for example, may vary from those for stakeholder CTFs.

Some equity accounts may offer greater potential rewards than either a stakeholder or cash savings account, although alongside this greater potential reward may come greater risk to the investment. Remember, any investment in stocks and shares can mean your child may get back less than paid in.

Other things to consider

You may also be interested in accounts that are invested ethically. For example, you may prefer an account that does not invest in companies who are significantly involved in areas such as exports for military users and animal testing for cosmetics, or in countries that have a poor record on human rights. That's why Family Investments gives you the option of an ethical fund.

For more information about the Child Trust Fund, visit the Government website at www.childtrustfund.gov.uk

Find out about the Family Investments Child Trust Fund

Find out about our ethical fund option