Your CTF choices

Stakeholder Child Trust Fund accounts

"Stakeholder” accounts were introduced by the Government to make investing in shares more affordable and attractive to a wider audience. The Bounty Child Trust Fund is a stakeholder account.

All stakeholder accounts have to meet strict Government rules to make sure they are affordable and limit risk. Meeting these rules, however, does not mean this type of account is suitable for everyone or that there is any guarantee of performance:

• Affordable - if you want to add to your child's account, the stakeholder is designed to fit all budgets. Payments can be made from as little as £10.
• Capped charges - companies can not charge any more than 1.5% of the account balance each year to look after your child's money.
• Reduced risk - money in the account is gradually moved from shares to lower risk investments after your child's 13th birthday.

As the Child Trust Fund money cannot be touched until the child's 18th birthday it's good to consider a long term approach to investing. Over the longer term, stock market linked investments would be expected to grow more than deposit accounts and are much more likely to protect your child's money against inflation. To take advantage of the growth potential of the stock market the account will invest mainly in shares. This means its value can fall as well as rise and your child may not get back all the money paid in.

Although there is no guarantee that this type of investment will perform as well in the future, the HM Revenue & Customs current guide to the Child Trust Fund states that stock market investments have outperformed deposit accounts for every 18 year period over the last 40 years.

Cash deposit Child Trust Fund accounts

If you do not want to invest in shares, you could choose a savings-type account for your child. A cash savings CTF is similar to a bank or building society savings account that earns interest except, like all CTFs, your child cannot access the money until he or she is 18. The money is protected and, as with normal deposit accounts, there are no charges although the provider's costs will be accounted for in the rate of interest they offer.

For parents who prefer the relative security of a cash account whilst appreciating potential growth is limited, Bounty Money also offer a cash CTF account through Skipton Building Society. For more information call 0845 600 4664* or use the Call Me button.

Equity Child Trust Fund accounts

These are for parents who are more confident about investing in the stock market. These types of accounts offer a wider access to more specialist fund types, for example, you might want to invest in the shares of a particular country.

Although, like the stakeholder, this type of account invests in stocks and shares, it does not have to meet the government's conditions for stakeholder CTFs so the charges might be higher or you might have to save larger amounts than with a stakeholder account.

Some equity accounts may offer greater potential rewards than either a stakeholder or cash savings account, although alongside this greater potential reward may come greater risk to the investment. Remember, any investment in stocks and shares can mean your child may get back less than paid in.

The final decision is yours and you need to consider what is best for you and your child, but bear in mind that you are planning for the long-term.

This CTF is provided by Family Investments. Neither Family Investments or Skipton Building Society is able to give you financial advice on the suitability of this product. If you have any doubts you should seek independent financial advice.

A Key Features document for this CTF account, which includes the Simplified Prospectus details, will be sent to each applicant. This document, and a Full Prospectus, are also available on request by writing to Family Investments Customer Service Team at their registered office address below.

For more details on this Government scheme, please visit www.childtrustfund.gov.uk.

Bounty Money is a trading name of Bounty (UK) Limited registered in England and Wales under registration number 631367. Registered office: Bounty House, Vinces Road, Diss, Norfolk IP98 6BB, UK. Bounty Money is an Introducer Appointed Representative of Skipton Building Society (SBS). SBS is authorised and regulated by the Financial Services Authority (FSA) under registration number 153706. Principal Office: The Bailey, Skipton, North Yorkshire BD23 1DN.

Bounty Money and Skipton Building Society offer a stakeholder CTF through Family Investments, a trading name of Family Equity Plan Limited (Co. No 2208249). Family Equity Plan is authorised and regulated by the Financial Services Authority (FSA) under register number 122351. Registered Office: 16-17 West Street, Brighton, East Sussex BN1 2RL.

* To help maintain service and quality, telephone calls may be recorded and monitored. (Lines open 9am-7pm weekdays, 9am-12noon Saturdays).