Children's Bonds (Children's Bonus Bonds)

This is another savings option for your child's future. Children's bonus bonds are a relatively low risk investment in that they have a fixed interest rate for the term of the investment and then a bonus added when the investment reaches five years. So you know how much you will get back at the end of the children's bonds investment. As well as that, the investment is not subject to income or capital gains tax.

You can invest in bonus bonds until your child is sixteen and the money can be left invested until your child is 21 years old.

The introduction of Child Trust Funds means that parents have an opportunity to give their child a good financial start in life, whether it is for university or even a deposit for their first home.

Before you choose children's bonds you may want to consider other possible investment and savings options such as:

Capital Bonds

Click here for a free information brochure about ways you can invest for your child.

Children's bonus bonds are bought in separate 'issues', each with its own investment limit and rate of return. In each issue an amount from £25 to £1,000 can be invested, with the option to cash the children's bonus bonds at the end of the five years or reinvesting them in another issue.

However if you withdraw your money before the five years are up, you will not receive the bonus and should interest rates increase, the rate on the bond will not.

We would recommend that you seek independent financial advice before making your final children's bonus bonds decision.

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