By Alison Hunt

If you've recently had a baby, you should have a received a Child Trust Fund (CTF) voucher. Indeed, anyone with a child born after 31 August 2002 should have received one. Worth £250 (£500 for low income families) this voucher must be saved into a Child Trust Fund account in your child's name, to create a lump sum for your child when he turns 18.

The problem is, while most people have heard of the CTF, and know that they need to stash that voucher into an account, deciding where to put it is an entirely different matter.

There are three choices:

• The cash based account - a tax-free savings account that your child can't access until he's 18. While the risk is low and there are no associated charges, cash based accounts are unlikely to grow massively.
• The government's choice - the Stakeholder account. This allows your child to invest in a number of shares but charges must be no more than 1.5%. This option exposes your child's money to the stock market, and when he turns 13 his account will be moved to less risky investments. While any stock market investment is riskier than saving money as cash, the potential for growth is far greater. And if you don't open an account within 12 months of receiving the voucher, the government will open a stakeholder account for you.
• The third option is to invest in an Equity or shares CTF, which allows you to buy shares or funds for your child. As this isn't a stakeholder product, charges are not capped and it is potentially quite high risk. But if you're a keen investor, this does mean you have control and could theoretically make your child a lot of money.

Depending on your level of risk you'll probably have an idea which option to choose – remember, you can transfer your child's money to a different CTF account at any time. Unfortunately, even when you've made this initial decision, you may still find it tricky to decide which provider to use.

Useful links
For the official list of CTF providers visit the Child Trust Fund website
Alison Hunt writes for Motley Fool, which is a MothersWhoWorks favourite, when it comes to all things money related.