It is one of the surprising aspects of these times of financial

turbulence that we are going through at the moment: the fact that people have stayed with the same

old traditional ways of growing their

cash.

This may be partly due to the restrictions that have been

imposed on many genres of investment.

Limitations on the versatility of long term

savings are considered by many to be too

severe.

Of all the options that are presently on the market the Child Trust Fund stands out from the crowd. It was set up with young people in mind.

For a start this Fund permits investors to save up to £1,200 a

year for a child and you may do this

tax-free. All interest or capital gains earned by the

money in the Fund is entirely free of capital gains tax or savings income tax.

Additionally there is no requirement to tie yourself to regular fixed payments.

There can be no doubt that one of the very attractive parts of the Child Trust Fund is the fact that the Parliament sends to all the parents of new born children a £250 voucher that

must be invested in a Child Trust Fund account.

It may appear surprising that the State

should decide to give out money for free.The idea is that the Fund

is intended to be an easy and effective means to start saving for

your son or daughter and assist a good

financial start to their adult life.

The mothers and fathers have a choice of what type of Child Trust Fund account to open. A popular choice is to go

for a high interest savings account or designated
Childrens Savings account that is provided

by most providers.

You will need to choose not only which account is

soundest for your child, but also which provider. There are a number of banks and financial organisations

offer approved child trust fund accounts. The government simply sends you a

voucher for £250, which you’ll vest in the account and provider of your choosing.

All providers are naturally regulated and must meet the terms and conditions stipulated by Parliament.

In conclusion I would like to describe some of the reasons why the

Child Trust Fund was created. It has been viewed as a way of

encouraging individuals to save more. It was also seen as a way of

preventing child poverty. Another reason was that the government is

trying to instil the benefits of investing

in the present generation and crucially in future generations as well. It is

considered that the general level of savings in the UK is too

little and this step was one way to help relieve the issue.

The future of a child is key to all parents and it is hoped that the information

provided here will aid parents to understand the choices and

chances that the Child Trust Fund introduces.