The Government's savings and investment plan introduced to ensure that all children have some form of savings when they reach the age of 18, is now available from Cambridge Building Society.
The Child Trust Fund is a long-term savings and investment account for children born on or after 1st September 2002. The Government gives each child a £250 voucher to start them off and a further £250 when he or she reaches age seven. In addition to the Government's contributions, parents, family and friends can add up to £1,200 to the child's account each year.
The Government's aim is that all children have some form of savings when they get to 18 and that the Child Trust Fund will help young people get into the habit of saving throughout their lives.
One of the first local parents to take advantage of the Cambridge Building Society's new Child Trust Fund is Sadie Parr, who opened a Cash Child Trust Fund account for her baby son Adam.
Commenting on the Government's savings scheme Sadie Parr said:
"As a parent I want to give my children some financial support for the future and the Child Trust Fund is a helping start. I was looking for a simple savings account option where I know the money invested will be secure and the value won't go down. The Cambridge Building Society's account was just what I wanted."
The Cambridge's new Cash Child Trust Fund pays an impressive tax-free interest rate of 6% p.a.
The Building Society's Head of Strategy and Marketing, Caroline Togher added:
"When new parents receive their child's Child Trust Fund voucher from the Government, they need to decide if they wish to invest the money in stocks and shares, such as a 'Stakeholder Child Trust Fund', or a cash based account such as our Cash Child Trust Fund. Whichever scheme they choose, they can deposit up to £1,200 in the account each year - but they must remember that once invested, the money belongs to the child and cannot be withdrawn. The total fund will be available to the child when he or she reaches 18.
"Our new Cash Child Trust Fund has been designed to be simple to operate. Parents, family and friends can all contribute to the account at any of our branches. The passbook will help parents and the child keep up to date with how the fund is growing.
"Statistics just released by the Building Societies Association confirm that where the Child Trust Fund provider offers a choice of both an equities based Stakeholder account and a simple cash account, 68% of parents opt for the cash account."
For more information on the Child Trust Fund please click here.