Child Bond

Start a regular investment habit

From between £10 and £25 a month, you could start a Child Bond with Scottish Friendly. You can also make payments on an annual basis if you'd prefer from £120 to £270 every year.

Payments are made by Direct Debit, so once set up you may hardly notice them leaving your account.

The Child Bond is a fixed term investment which runs for a minimum of 10 years, however you can select to invest for longer, until the child’s 18th or 21st birthday.

The Child Bond is the property of the child and you can be sure they’ll appreciate the extra money when they’re older.

In addition to your child's Junior ISA allowance

If you've already used up their Junior ISA allowance for the current tax year don't worry! The Child Bond lets you make use of a special tax allowance available to friendly societies - like Scottish Friendly.

Read more about tax and tax exempt savings plans in the important things to think about tab.

Life cover comes as standard

As a condition of the tax benefits, with the Child Bond you also get life insurance for the child. This ensures that on death the child’s estate will receive at least the guaranteed minimum cash sum plus any locked in bonuses. You should consider if this is appropriate for the child’s financial needs. The level of cover depends on their age and your payments into the Child Bond.

Long term growth potential

Unlike a traditional savings account, you don't earn interest on the money you pay in.

Instead, a Child Bond puts your money to work in our With-Profits fund which invests in a range of assets which includes shares, bonds, property and cash.

The Key Information Document (KID) gives you an overview of the fund together with any fund charges and should be read alongside the Product Guide.

The 'What could my child get back?' section below provides an additional example of what you could get back in the future based on a payment amount which is lower than that shown in the KID.

A guaranteed minimum cash sum

What’s special about the Child Bond is the guaranteed minimum cash sum your child will receive at the end of the fixed term. This gives you the reassurance of knowing that part of their total investment is protected.

The guaranteed minimum cash sum will depend on the child's age and how much you pay each month. At first it will be less than the money you’ve paid in but it’s designed to increase through the addition of bonuses.

Long-term growth potential in the Child Bond comes from the addition of regular bonuses and a potential final bonus. The value of these bonuses is based on the profit we make, our investment returns and the way in which we distribute these to our customers and bonuses are not guaranteed.

How your child's investment could grow

Because your investment is linked to a range of assets it’s impossible to tell you the exact return your child may get in the future - but we can give you a rough idea.

The chart below provides examples of what you could get back in the future based on a payment amount which is lower than that shown in the Key Information Document.

Projected returns on £25 per month invested over 10 and 15 years*

Projected returns for illustration only. Remember your original investment is not guaranteed and the child could get back less than the amounts shown.

You can see in the illustrations above that the lower projected growth rate of 1.5% a year provide returns which are less than the total paid in over a 10 and 15-year term. This is due to the effect of charges in the first two years and cost of life cover for the duration of the bond.

* Based on a child aged 6 next birthday. Total amount invested over 10 years is £3,000 and over 15 years is £4,500. Based on current tax law, which may change.

These figures are only examples and are not guaranteed. They are based on premiums being paid for the full 10 or 15 years. They are not minimum or maximum amounts. The guaranteed minimum cash sum depends on your premium and the duration of the bond. What the child gets back depends on how the investment grows and on the tax treatment of the investment. Do not forget that inflation would reduce what the child could buy in the future with the amounts shown. (For more details on the effect of charges on the bond, please see the Product Guide).

The annual rates of growth for the illustration have been based on our reasonable estimate of potential returns and are subject to the maximum projection rates permissible by the Financial Conduct Authority. All the figures include the deduction of the actual charges assumed on the bond. These charges may vary in future. Figures are only examples and the projected benefits are not guaranteed.

Each year we will send you a statement showing the bond's current value.

Welcome gift

After you take out a Child Bond we’ll send you a welcome gift - a £25 My Rewards gift voucher. You can redeem your voucher at numerous outlets throughout the UK including the Apple Store, John Lewis & Partners and Love2shop.

We will send your My Rewards voucher within 28 days of receiving your first payment. Once registered you will be able to access the full list of retailers.

Member benefits

Once you have applied, if you sign up to the My Plans online service and opt to go paperless, we’ll send you a My Benefits card.

My Benefits gives you access to fantastic savings and offers from thousands of leading brands and local outlets. This includes offers on eating out, leisure, travel and holidays, household goods, gym membership, DIY and electricals from a range of retailers.

Being part of a mutual

Scottish Friendly is a mutual - this means we don’t have shareholders, which also means any profits are used to benefit our members.