Child Bonds FAQ's
We answer your most common questions first...
Why would I use Savings Bonds for my children?
Child savings Bonds let you save £25 a month for any child under 16 completely tax free.
Is there a minimum investment period?
Yes, child savings bonds have a minumum investment period of 10 years.
How will my money be invested?
Your premiums are invested into a with-profits fund and come with a guaranteed minimum cash amount at the end of the bond's life.
Will income tax or capital gains tax be due on payout?
No, child saving bonds are excempt from both taxes. The entire final amount will go to the child.
Can the savings bonds go down as well as up?
Yes, the minimum cash sum you're guaranteed will initially be less than your total payments, however it is designed to grow through additional regular bonuses and a potential final bonus.
Can i set up a bond for a grandchild, niece or nephew?
Yes, you can set up a child savings bond for any child you want to help - they don't even have to be related.
How much potential returns could be made?
Bearing in mind that the bond investment could go up or down over its full term the graph below can give you an idea of how much the bond could make over a 10 or 15 year period with various potential interest rates.
A savings bond is a type of bank account where your money is retained for a fixed period. The interest you earn on your investment is ploughed back into your account and determines the overall growth.
Savings bonds are primarily aimed at savers happy to leave a sum of money untouched for a few years to accumulate interest without making frequent withdrawals.
By giving up access to the savings a better rate of interest is received.
These are very different from savings bonds as they are based on investing in a variety of funds rather than saving in a bank account.
Thinking of putting away a nest egg for your kids into a high interest savings account instead?
Use our savings calculator to work out how much you would get by investing a lump sum in a savings account instead of a savings bond.
Child Trust Funds
Child Trust Funds are for children born between 1 September 2002 and 2 January 2011. You can save up to £1,200 a year towards your child's future - free from tax and with additional government contributions.
The Child Trust Fund or CTF was initiated by the government to give children a big financial boost when they turn reach the age of eighteen.
The parents of every newborn child in the UK currently receive a voucher for £250 from the government for use in starting up a Child Trust Fund (CTF) account.
Any children in families receiving full Child Tax Credit will get an extra £250 once the trust fund has been opened. Child Trust Funds are an excellent and safe way of introducing your child to saving and responsibly looking after their money.
- Save up to £1,200 a year
- £250 government payment to kick-start your fund with further payments to follow
- Money grows free of income tax and capital gains tax
- Guaranteed minimum cash sum at end of payment term
- Anyone can invest in a child trust fund for a chosen child