Parents with any money left over after Christmas may wish to invest it in a child trust fund (CTF).
James Caldwell, director of Fair Investment, said: "Deposit-based child trust funds could be a good way of investing money that might otherwise be frittered away
"Your children are likely to thank you when they hit 18 and find they have a substantial nest-egg waiting for them."
However, he warned that it was important for parents to compare rates offered by the various savings accounts to make sure they were getting the best deal.
He said that more than £12,000 could be lost if parents chose the lowest interest rate paying CTF as opposed to the highest.
But he added that "other types of savings account could offer great flexibility" than CTFs and recommend parents explored the full range of options before opening an account.
The child trust fund scheme was launched by the government in 2002.
Each child born on or after September 1st of that year receives £250 to start their savings account.
Parents should look at investing in child trust funds
Parents should look at investing in child trust funds
Wed, 09 Jan 2008
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