Alder's Tone

First account opened was a Rainbow Saver account with RBS to hold the cash he got with his new baby cards.

Nationwide’s Smart account offers up a higher interest rate, the service was superb (even down to getting into the branch before opening, out of the cold rain with a cuppa), so his next account was opened there. Spreading the risk already…

Money from England
Money from ScotlandWhat about the Child Trust Fund? Oh dear, dilemmas. Cash or Stakeholder? We haven’t seen a stakeholder that tells us what we need to know yet – what are the performance figures since they started, taking into account the maximum 1.5% charge (that every provider seems to charge, haven’t seen one lower than maximum). Sure, they are quite good at showing stock market figures for the last 18 years, but no accounting for the annual 1.5% drop. Even some of the major players say “invested in the stock market” and don’t elaborate. Is that the FTSE 100? FTSE 250? All in George Wimpey plc shares?

I’m not keen on the FTSE 100, there are too many movers for my liking. For example, a company drops out, a 100 fund has to sell its shares. Inevitably at the lower price now they’ve dropped out. A company comes up, a fund has to buy shares in them, inevitably at the higher price now the company has moved up. Seems wrong to me, selling low and buying high, it just means the rest of the 100 has to perform well enough to cover these transactions. To me, buying low and selling high makes better sense, but what do I know.

With the markets currently running high I’m scared of a stakeholder CTF, mainly because his £250 voucher from Gordon Brown wouldn’t buy many units. I’m waiting for the inevitable downturn, then I’ll buy. But what to do in the meantime? Well, thankfully, you can open one type of CTF and then change it, so it’s a no-brainer. Cash for now, then when the FTSE drops it’ll go into a Nationwide stakeholder. Why Nationwide? They’ve got the clearest literature on who they invest in and what past performance has been.

And if he wins the Christmas Premium Bonds super draw then I’m sure that Ferrari F340 daddy has his eye on will turn out to be a good investment.

And the final tip we read in a parenting magazine, submitted by a reader. Child Benefit is currently around £17.50 per week for a first child, add this to the trust fund and even if there’s nothing else added there’s over £16,000. Of course, it goes up a little each year, add interest annually, and you could be looking at over £20,000. 20 grand at 18, the parties are endless!