The Children’s Mutual Baby Bond is our popular stakeholder Child Trust Fund (CTF) account.
It includes all the government’s features for stakeholder accounts which are designed to provide a good financial outcome for your child’s investment.
Why choose Baby Bond Child Trust Fund account?
- Long-term growth
Greater potential for long-term growth by linking investment to company shares.
- Free from personal taxes
All investment growth and the payout at 18 are free from personal taxes.
- Managing risk
Investment reflects a wide range of UK company shares to spread risk. A built in feature to limit the risk of losing value should share prices fall as your child’s 18th birthday approaches.
- Charges capped
Charges are capped at 1.5% of the CTF account’s value each year.
The minimum payment you can make into a CTF is £10. The maximum is £4,080 a year (birthday to birthday). The easiest way to make regular payments is by setting up a regular Direct Debit. You can also make one of payments by cheque or debit card.
The aim of Baby Bond Child Trust Fund account is to build up a tax-free lump sum for your child when they reach 18. This can then be used for whatever they choose – maybe to help fund further education, buy their first car or to travel the world.
Investing your child’s money with experts
Your child’s money will be invested in a fund that holds company shares. The shares are selected by one of the UK’s biggest investment companies, Aberdeen Asset Management (Aberdeen). They make all the key investment decisions about which shares to buy and sell.
Getting a great return on your investment
The Children’s Mutual believes that shares should produce better returns in the long-term than cash savings. That’s why our Baby Bond CTF account, which runs for 18 years, is based on investment in shares. However, past performance is not a guide to the future and your child could get back less than has been paid in.
Protecting your investment
Investing in individual shares carries more risk than spreading investment over a wider range of shares. That’s why Baby Bond Child Trust Fund invests in a fund that aims to match the performance of a broad range of UK company shares, rather than just a few.
And, any money that you add to your child’s CTF account while the price of shares is low will be able to buy more shares in the fund – meaning that the account will have a better potential for growth should share prices start to rise.
The Children’s Mutual will gradually move the money in your child’s Baby Bond to lower risk investments (such as government bonds and cash) from your child’s 15th birthday. This is called lifestyling.
Tax efficient investment
Under current regulations all investment growth in your child’s CTF account, as well as the lump sum payout at 18, are free from personal taxes.
Another benefit of the Stakeholder Baby Bond Child Trust Fund account is that there are no hidden charges. There’s just one simple, fixed administration charge of 1.5% of the account’s value each year, already allowed for in the price of shares in the fund.
If you wish to transfer your existing Child Trust Fund account to us, here’s how to transfer to us.
Please remember that because Baby Bond investment is linked to shares, the value of the account could fall as well as rise, and your child may get back less than has been invested. All payments into the account belong to the child and cannot be returned to the payer if they change their mind. No-one can access the money except your child, and not until age 18.