Unreviewed - content source has not yet been reviewed for DirectScot
Opening a Child Trust Fund account - a beginner's guide
Once you've got your Child Trust Fund (CTF) voucher, you need to choose the type of account you want and a provider to run it. Then you need to open the account as soon as possible. This step by step guide will help you get started.
Step one - choose an account
You need to decide what type of account is best for your child. You can choose from different types of CTF account, depending on how you want to invest the money.
You can't use the account you have your Child Benefit paid into.
Step two - choose an account provider
Once you have decided what type of account to open, choose a provider that offers the type of account you want. These are organisations that have been approved by HM Revenue & Customs (HMRC) to provide and run CTF accounts.
You can go directly to a specific provider to open an account. Or you can open an account through a CTF 'distributor' instead. 'Distributors' are companies (including some retailers or supermarkets) that offer CTF accounts on behalf of providers.
Accounts opened through a distributor are still run by a CTF provider. The distributor simply acts as a link between you and the provider.
What to look for before choosing a provider - checklist
Try to look at a number of CTF accounts from different providers and distributors before you decide where to open your child's account. Think about:
- fees for running the account
- if you have to put money into the account
- if there's a minimum amount that has to be paid in
- the likely return on the money you are investing
- if you can manage the account by telephone, online or in person
- how other people can pay into the account
- how you can check the amount of money in the account
Step three - open the account
Who can open an account?
You can open an account if one of the following applies:
- you are the person who was sent the voucher
- you don't get Child Benefit for the child, but have 'parental responsibility' for them
Parental responsibility can apply to:
- adoptive parents - but only when the adoption is finalised
This does not include:
- grandparents or other relatives - unless they are the child's legal guardian
- foster parents
If nobody has parental responsibility, HMRC will open an account for the child.
If someone with parental responsibility becomes available at a later date, they can then apply to manage the account.
How to open an account
To open an account, you may have to do one of the following:
- fill in the provider's application form by hand
- apply over the telephone or internet
If you're not already a customer with the provider, you might have to prove your identity. For example you may need to provide a valid passport, driving licence or utility bill.
There's no need for you to go through a credit check to set up the account. This is because the account belongs to your child, not you.
What happens after you've opened the account?
There may be a cooling off period before the account is set up. This allows you to change your mind and open a different account without any penalty.
The account won't be opened until the end of the cooling off period. Money can't be paid in until then.
Check with your provider:
- how long the cooling off period is
- when you're likely to see the money in the account
Once you've opened the account you:
- become the main point of contact for the account - called the 'registered contact'
- are responsible for managing the account until your child is 16
- can change to another account or provider at any time
What happens if you don't open a CTF account?
If you don’t open a CTF account before the expiry date on the voucher, HMRC will open one for your child. This will be an account known as a 'Stakeholder' account. You can find out more about this type of account by going to link 'Help with choosing a Child Trust Fund account' below.
HMRC will write to whoever gets Child Benefit for your child telling them where the account is held. They will also let you know that someone with parental responsibility will need to become the registered contact for the account.
If you become the registered contact, you can change the account to another type of account or provider at any time.
If your child dies before you open the account
HMRC will arrange for your child's personal representative (this is usually the executor or administrator of your child's property and possessions) to get the money your child was entitled to. This may help with any extra costs you face at this difficult time.
Contact the CTF Helpline to let them know your child has died. You can send in a letter instead if you prefer.
More useful links
Provided by HM Revenue & Customs who administer the Child Trust Fund