Best Investment Money

Admin | December 04, 2011 | Comments Off

Best Investment Money

Best Investment Money

At 0.5%, low interest rates are negatively affecting all savers. This is the lowest interest rates have been in 315 years, so children's savings aren't currently keeping pace with the rate of inflation. However, it is important to remember that this position will change in a few years time.

The main benefits of investing early in life is that kids benefit from tax-free savings and all interest is compounded over time. The proceeds of children's savings or Child Trust Funds can be useful later on in life for a house deposit or to cover rising university costs.

Government Child Trust Funds

Every child born after September 1, 2002 is entitled to a Child Trust Fund voucher for £250. The proceeds can be invested in a deposit account, stock market, or stakeholder Child Trust Fund. Families on low incomes are assisted by a further £250 Child Trust Fund voucher at age 7. A parent can top-up this sum with up to £1200 per annum, creating a useful source of tax-free savings for the child's future.