Children's bonds

There are a variety of methods of investing for children even though the government has recently stopped its contribution to Child Trust Funds (CTF’s). Children’s bonds also known as children’s bonus bonds are one way of investing tax free for your child’s future.

They work by an adult investing a lump sum in the child’s name and they pay interest annually and then a further bonus at the end of a five year period. Both the interest and the bonus are fixed so these represent a safe and low risk investment vehicle for your child.

The drawback with children’s bonds are that the rate of interest is low and also fixed so if interest rates rise during the term of the bond your rate will not rise in line. Also, if you withdraw funds you will not qualify for the bonus. There are also a number of options for savings for grandchildren that work in a similar way to provide low risk but fairly low return investments.

	The best savings bonds on the market Savings bonds are a great way of maximising the rate you can get on your savings in a period of low interest rates. However, there are pitfalls, as Kate Saines explains.
	Yield on Spanish medium-term bonds leaps to more than 5% The yield on Spanish medium-term bonds increased in a sale today as it was confirmed that the country has entered recession amid fears of an escalation in the Spanish banking crisis.
	Monmouthshire BS launches two new savings bonds The Monmouthshire Building Society has launched two new savings bonds. Its one-year bond pays 3.10 per cent and its two-year bond pays 3.25 per cent.
	Santander release savings bonds paying up to 3.70% Santander has launched a tracker bond and a fixed rate bond that pay up to 3.70 per cent gross AER.
	Santander releases new fixed rate and tracker savings bonds Santander has launched two new fixed rate savings bonds that pay up to 3.70% interest. They have also released a tracker bond that offers base rate plus 2.70%.