Child Trust funds and ISAs
After 2010 no new Child trust fund bank accounts (CTFs) were allowed; instead children could have money invested on their behalf in a Junior ISA. Both accounts pay interest tax free and an annual maximum, currently £3,720 can be invested each year. However, those with CTF accounts are blocked from also having Junior ISA’a and CTF accounts usually pay interest at a lower rate, as little as half that for junior ISA’s.
Originally, the government refused the suggestion that parents should be allowed to switch money from a CTF to a Junior ISA. However, it eventually conceded to pressure and has now set a date from which transfers will be allowed.
Therefore from 5 April 2015 money in CTF accounts can be shifted to Junior ISA’s. It will be worth looking around for the best rate of interest which I would expect will be marketed in the period leading up to this time.