If you've recently gained access to your OneFamily Child Trust Fund, you may be wondering; what's the best thing to do now? It's exciting to find out you have a lump sum of money, and you may know exactly what you want to spend it on. Or perhaps you're not too sure, but you know you'd like to put the money towards something in the future.
To help you decide, we've partnered with OneFamily to help you find the savings account that is right for you. Register for a Raisin UK Account, check out the savings accounts available on our marketplace, and take time to consider what you'd like to do with your money. When you've received your Child Trust Fund, you can then fund your chosen savings account and begin your savings journey!
What should I do with my money?
Save it
If you know you don’t want to spend the money now, but think you might want to in the next few years (perhaps on a car, or as part of a house deposit), it’s a good idea to think about moving the money to a high-interest savings account, so you can continue to grow your pot.
The worst thing you can do is keep the money in your current account, as interest rates are so low, you’re likely to earn pennies, rather than pounds, on any savings you have (plus, you might be tempted to regularly dip in and out of it!)
Spend it
Let’s face it, life is for enjoying, too. Whether it’s for driving lessons or a holiday with your friends, you could use your Child Trust Fund to do something that you’ve always wanted to do. Just remember that once the money is gone, it’s gone, so make sure you consider whether you really need that must-have item.
Half and half
Depending on how much your Child Trust Fund is worth, you could do a bit of both – you could spend some, and save some. You could even save your money in more than one savings account for extra flexibility, such as a high-interest fixed savings account and a more flexible easy access savings account. Below, we explain more about the account types available with Raisin UK.
Savings accounts available at Raisin UK
Fixed rate bonds
Ideal if you know you want to use the money for something specific in the future, and you’d like to earn as much interest as possible in the meantime
- You’re likely to earn the most interest with this type of savings account
- However, you’re agreeing to ‘lock’ the money away until the end of a set term, so you won’t be able to withdraw any money until then
- The length of the term could be 6 months, 1 year, 18 months, 2 years, 3 years or more, depending on the account you choose
- The interest rate is ‘fixed’ for the whole term, so you’ll know from the start how much interest you’ll earn by the end of the term
Easy access
Ideal if you want to keep earning interest on your money, but you would like to be able to withdraw money at any time.
- This is one of the most flexible types of savings accounts
- You can withdraw money whenever you want, whilst still keeping the easy access account open
- You can also top up the money in your account whenever you want to
- The interest rate isn’t fixed, so it could go down whilst your money is in the account, meaning you’ll earn less interest on your savings
Notice accounts
Ideal if you want to put your money away now and keep earning interest on it, but you know you would like access to the money on a set date in the future
- You’re likely to earn a good rate of interest with this type of savings account
- You can keep the money in the savings account for as long as you like, but you’ll have to give ‘notice’ when you want to withdraw your money
- This notice period could be between 30 and 180 days. After you give notice, you’ll receive your money after this time period has elapsed
- The interest rate isn’t fixed, so it could go down whilst your money is in the account
What does ‘FSCS protected’ mean?
You’ll notice all of our savings accounts in the table above have the FSCS logo next to them. The FSCS, which stands for Financial Services Compensation Scheme, is the UK’s deposit protection scheme. The FSCS guarantees that your money is protected up to £85,000 per person, per banking group, in the case of something happening to your bank or building society. All of the banks on the Raisin UK marketplace are FSCS protected (or the European equivalent), which means your money is completely safe and secure. You should always look out for this logo when opening a savings account, to ensure your money is fully protected.
