Child Trust Fund

What is a child trust fund? The term ‘child trust fund’ was apparently scrapped within the finance world in 2011 which means you can no longer open up a child trust fund but instead you need to ask for a Junior Isa (JISA) A Junior ISA is a savings account at which you can save or invest up to £9,000 within a tax year. When the trustee becomes 18 years old, it will then turn into a standard ISA at which time, they can be in charge of the money invested or saved.

The Child Trust fund or Junior ISA’s are usually no access accounts which means no one can withdraw the money - not the child nor the adult, parent or guardian that opened the account.

There are two types of Child Trust Fund or Junior ISA’s:

A standard junior ISA which is essentially a savings account at which the money would be safe (providing it is in a UK bank - with under £85,000 with that financial institution) with a defined amount of interest which will not grow as quickly as it would with inflation.

A child trust fund junior stocks and shares ISA which is when you put money into certain stocks and it depends on how your money is handled with what stocks and how many shares purchased and the rate they may increase or decrease.

Here are a list of the best Child Trust Fund accounts you can open for a Junior ISA

1. Coventry Building Society

At a variable annual interest of 2.95% (Tax Free) which will be paid into the account every 30th of September and final payment when the child turns 18. This is a no access Child Trust Fund account which means the money cannot be taken out or moved around until the child turns 18.

2. Darlington Building Society

At a variable annual interest of 2.50% (Tax Free) which will be paid every 31st of December - can only be opened for a child up to the age of 16. This is also a no access/no withdrawal Child Trust Fund account.

3. Bath Building Society

At a variable annual interest of 2.50% (Tax Free) which is also paid 31st of December - Will be switched to an adult ISA once the child turns 18. No access Child Trust Fund account.

4. Dudley Building Society

At the variable of annual interest, it is also 2.50% (Tax Free) but this Child Trust Fund account is only allowed to be opened with a minimum deposit of £100 but with a maximum operating balance of £500,000