Child Trust Fund Equity Accounts

 

Equity Child Trust Fund Accounts, invest your money on the stock market by buying shares. Investing in stocks and shares is more risky than simply putting your money into a savings account as the value of shares can decrease as well as increase. If the value of the shares you own goes down, then so does the overall value of you child trust fund. However, when you invest money for a long time such as the term of the child trust fund, shares almost always produce better returns than that of savings. This is because poor perfomance by a company in one year is normally counterbalanced by better performance in a following year.

Equity accounts offer greater returns than that of other accounts, but due to the risk invloved are not always for everybody. In a worst case scenario, you could loose most of your investment. However, for every 18 year period over the past 40 years stocks and shares have out-performed other methods of investing. Although this does not guarantee the future years.

Again as with the other account methods, any child trust fund company will make a charge for operating the account on your childs behalf. With an equity account this is usually a percentage of its value. This percentage is not fixed and so may vary from providing company to providing company.

In todays society, some people want the benefits of having an equity based CFT but dont wish to invest in companies whose ethics dont match up with theirs. ie investing in businesses who trade in weapons, tobacco or alcohol. All child trust fund providing companies are required to publicise their policy about social, ethical and environment investments so be sure to ask them if this concerns you.

As with both other forms of child trust fund you can invest extra payments into the fund. This is a very good idea with regards to the equity fund as it allows more and more shares to be purchased. The maximum amount you can ivest in any one year is currently £1200.

 

 

Apply For Equity Child Trust Fund Account

Apply For Saving Child Trust Fund Account

Apply For Stakeholder Child Trust Fund Account