Child Trust Fund

Child Trust Funds were introduced by the Government to make saving for your child's future easier.

As new parents, you'll receive a voucher from the Government - you can then decide on where you'd like to invest it.

If you don't invest the voucher within a year, the Government will invest it for you. It's up to you to act, to make sure it's invested where you want.

Once you've opened an account, you - and grandparents, relatives or friends - can add money to the account. You, or anyone else, can pay in £10 or more, up to a maximum of £3,600 a year.

When your child reaches age 18 they will be able to access the money.

A Child Trust Fund is tax efficient as well. There's no tax to pay on any interest earned, so your child's savings can grow even faster.

If you start saving when your child is young, by the time they reach age 18 their savings could be enough to:

• pay some of their college or university expenses
• buy their first car
• help towards a deposit on their first home

Equally important, you'll be setting a great example and your child will appreciate the value of regular savings.

• Investing with RBS

There are lots of good reasons for investing your Child Trust Fund voucher with RBS. Here are just a few of them:

• The potential for higher returns - the funds are largely invested in the stock market, managed by experts to give more potential for growth. However, unlike a deposit account, remember that the value of the Child Trust Fund may fall as well as rise, and profits are not guaranteed
• Reduced risks, compared to investing solely in shares - When your child turns 13, we gradually move the money in your child's account into lower risk investments This helps to protect any gains their investment has made
• Capped charges - the annual management charge is capped at 1.5%, and there are no up-front charges. In other words, more of the money can be invested in your child's future
• Less for the tax man - under current tax law, all the growth in a Child Trust Fund is free of income and capital gains tax
• Top up your investment - why not save regularly with a Direct Debit? Or, you and your friends or relatives can make additional investments from as little as £10 a time, up to a limit of £3,600 a year

• Common questions

• Am I eligible to receive a Child Trust Fund voucher?
• How do I get the voucher?
• When can my child take money from the account?
• How will I know how much the fund is worth?
• Do legal guardians receive a Child Trust Fund voucher?
• Can I exchange the voucher for cash, or pay it into my own bank account?

If you are over age 16, or have parental responsibility for a child living in the UK; born on or after 1 September 2002 until 31st December 2010 and are eligible for Child Benefit, you will receive a voucher. You can use the voucher to open a Child Trust Fund account.

If you receive Child Benefit, you'll automatically receive a voucher for each child born on or after 1 September 2002 until 31st December 2010. For children born after the 31st December 2010, government vouchers will cease. You do not need to make a claim for the voucher.

The money must remain in the account until your child is age 18. At that age, your child is free to withdraw the money.

Every year, around your child's birthday, you'll receive a statement showing how much the fund is worth.

Yes. Provided they have parental responsibility and receive Child Benefit, they can open an account. Special arrangements exist for children in care.

No. It can only be invested in a Child Trust Fund account.