Think that your Child Trust Fund is dying just because they are no longer being issued? This is not the case at all. It’s true that the government has issued an announcement that Junior ISAs will be replacing the Child Trust Funds, but the truth is that if you already have a CTF, you can still keep it.

As long as your child was born between September 2002 and January 2011 they can have a CTF in their name. The account will remain open and active until your child reaches age 18. These accounts were started with a 250 pound voucher in most cases, and you would put in money as you went along for your child.

If you already have a CTF account for your child but you want to switch it, you definitely can do that. You might want to look around at other providers and look at what their performance rate actually is. You just need to make sure that you think about everything involved before you make any type of decision. It might be tempting to just go with the provider that you’ve always had, but it’s really going to cheat your child out of the performance that they could be getting out of their CTF.

Keep in mind that under the terms of the CTF, you cannot withdraw any of the money in the CTF. The only thing you can do is transfer it from one CTF provider to another.

The nice part about the CTF is that you will be able to have a tax-free way to save for your child’s future. The assumption here is that you are saving for the long term, which means that you can’t withdraw any of the funds. So if you have short term goals that you want to focus on, this is not going to be the right account for you. It’s also important to note that since providers aren’t accepting new applicants into the program, providers will not always offer good interest rates on existing accounts.

Again, it’s just going to be important to compare all of the offers you get and look into where your children’s savings are really going to go.

The Junior ISA is becoming the best way to go, especially if you don’t qualify for the Child Trust Fund for some reason. Children born before September 2002 or after 3rd Jan 2011 will fall into this category.

Like the CTF, Junior ISAs are tax-free, and you must make sure that you don’t withdraw anything before they turn 18. After that, the money is theirs to do with as they wish. It’s going to be up to you to talk to your children about smart ways to handle the money, especially if they have dreams of higher education.

The difference here is that the government does not make a contribution to your child’s savings in any way.

The government continues to change the way we invest and save money, which is why it’s always a good idea to look into all of your options before you make any type of long term decision. Good luck out there!

By Jasmina