These accounts invest your child’s money by buying shares in companies. When those companies do well and the shares go up in value, they make money.
This type of account has the potential to do well when money is invested for a long time. This is because poor performance of shares in some years can be made up for by good performance in others, and over a long time period the stock market’s value tends to rise more than it falls.
Investing in shares is more risky than putting money in a savings account as shares can lose value if companies are not performing well. But in the past an amount of money left for a long time in this type of account has grown more than the same amount left in a savings account. This is true for every 18-year period in the last 40 years.
Nobody can promise that shares will continue to be the best long-term investment but in the past this has usually been the case. However, you must remember that shares can go down as well as up and past performance is not a guarantee of how shares will perform in the future.
The charge on this type of account is usually a percentage of its value. You should check how much this would be with your chosen provider.
More information
Types of account
Savings accounts
Stakeholder account
FAQ
Further information about types of account
