October 6, 2008
Save for Your Child in a High Interest Child Bond
Children grow up fast which means it is important to consider saving when they’re young. By saving from just £10 to £25 a month with Scottish Friendly’s child bond at this time you could make all the difference when they are older. For instance helping to pay for university fees or for the deposit on a new car.
You can save tax-free for any child with a Scottish Friendly Child Bond. It’s tax-free because it’s a friendly society savings plan, which means that under current law it grows free of income or capital gains tax. It is an ideal way for parents, grandparents, family members and friends to make a big financial difference when the childen are older.
In essence the Child Bond is a with-profits investment plan: It invests for long-term growth as well as a degree of security, in stocks and shares, fixed interest funds and cash
Money grows by way of the addition of potential annual bonuses and when the bond matures there is a tax-free payout. The value of bonuses will depend on how much profit we make and how we distribute it. Please note that bonuses are not guaranteed.
The Child Bond lasts for a minimum of a decade, but you can invest for longer if you want - perhaps to coincide with an 18th or 21st birthday. You can save either monthly, annually or with a lump sum payment.That is completely up to you. Please note if the plan is cashed in before the end of the term, the amount the child will get back may be less than the amount paid in.
If you select the monthly option, you can begin saving from as little as £10 a month - up to a maximum of £25 a month. Or you can make annual payments of up to £270 a year.
You can also take care of all of the premiums in one go through our lump sum funding plan. If you invest the maximum sum of £2,340 for a 10 year period, this actually invests £270 a year into the Child Bond - a total of £2,700. The minimum lump sum of £1,040 will provide £120 a year for 10 years - a total of £1,200. This provides a means for you to take care of all your premiums in one go and is especially popular with grandparents who like the reassurance of knowing all premiums for the entire term of the plan are taken care of.
This plan includes life cover so you should consider if this is appropriate for your financial needs.
