Child Trust Fund rates fall

01 Jul 2008

Child Trust Fund (CTF) rates have reduced by 0.21% in a year, parents have been warned.

MoneyExpert.com also revealed that the average cash CTF earns 6.29% interest, as compared to 6.5 % in June 2007.

The firm highlights that this cut is despite banks increasing savings rates on other products to raise money.

"For savers the only way is up in the credit crunch unless you're a parent with a cash CTF," commented director Sean Gardner, adding that the fall in rates is "really disappointing".

MoneyExpert.com also revealed that the gap between the best and worst-paying CTFs has widened. The best rate is currently available from Hanley Economic Building Society at 7.75%, whereas Abbey pays just 4.5%.

"Any parent who is receiving a lower rate than the average should switch or start thinking up a really good excuse to explain where it all went wrong when their children are 18," added Mr Gardner.

Before CTFs were introduced, just a fifth of families were regularly saving for their children, according to The Children's Mutual. However, nearly half of new CTF accounts received monthly top-ups last year.

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