One of the best ways so as to help parents save up for their child’s future is through Child Trust Funds. Currently, there exist three options that one can choose from when it comes to such funds which are savings account, shares account and stake holder account. Of these three, the savings account is the safest as one will not lose any money through it. Then again, the returns aren’t high like that of the other two. You can generally gauge risk with a good piece of options pricing system.
The shares account on the other hand works by investing the money of one’s child’s in the stock market. This type of fund is risky since there is a chance of losing one’s money especially if it is just for a short term. Meanwhile, the stake holder account is a medium risk. It works by investing the money of one’s child in shares until one’s child turns thirteen. The money is then transferred to a low risk investment.
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