Parents have been warned to ensure they make the right choices when looking for their child trust fund savings accounts.
Selecting the wrong savings option could cost the price of a car when the fund matures, MoneyExpert has claimed.
Rates offered by providers of the savings accounts vary by 1.75 per cent, while two-thirds do not guarantee to keep the interest paid above the Bank of England's base rate – a number which is falling – the company asserted.
However, MoneyExpert also noted that the average rate paid on cash child trust fund savings accounts has increased by 0.26 per cent in the last year.
Sean Gardner, chief executive of MoneyExpert, commented: "Child trust funds are a fantastic initiative and a great way to build a healthy savings pot for your children.
"Our analysis shows that cash child trust funds are becoming a bit of a minefield. With fewer guarantees available and with such a variety of standard rates around, parents must choose carefully."
Ed Balls, the economic secretary to the treasury, recently claimed that child trust fund savings accounts had exceeded the government's expectations since their inception.
Expert issues warning over child savings accounts
Financial Services > Savings > Savings and Investments News
Expert issues warning over child savings accounts
Tue, 24 Oct 2006
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