The potential merger of two mutual savings providers would hopefully result in better value for money in the world of the child savings account.
The Children's Mutual has revealed that it has begun "exclusive negotiations" to move almost a million of its child savings accounts into Canadian-owned Forester Life.
Formerly called the Tunbridge Wells Equitable Friendly Society, 130-year-old The Children's Mutual has 927,000 customers with money in Child Trust Fund (CTF) accounts whose parents invested Government vouchers.
The rate on money saved in a Children's Mutual Baby Bond CTF goes up to 1.5% a year, close to the rates offered by Forester Life CTFs.
And Euan Allison, UK group managing director of Forester Life, said: "We believe that this potential transfer would be beneficial to both members of The Children's Mutual and our own members."
Child Trust Funds and Junior Isas
In order to encourage saving, the Labour government first brought in CTFs while the current coalition government started Junior Isas (Jisas) in autumn 2011.
Those with CTFs cannot currently open Junior Isas, but with concerns that many Junior Isas offer the better deals, many are urging that such child and family savings accounts should be allowed to be converted.
It is estimated that the cost of bringing up a child until the age of 21 is £218,024, so it baring in mind this cost, it is important to budget properly and save for your child's future. There are many ways of doing this, and it is first of all important to decide on whether to save or to invest.
For instance, it is possible to invest up to £3,000 a year in National Savings & Investments (NS&I) Children's Bonus Bonds and up to £3,600 tax free a year in Cash Junior Isas, although it is worth deciding on whether you are saving to spend on your child or to give to your child.
Better value on child and family savings
Forester Life's Allison said: "We anticipate being able to provide better value for policyholders primarily through cost savings driven by economies of scale.
"It also offers the potential for all members to be a part of larger mutual organisation, supported by our parent organisation in Canada.
"Through the due diligence period we will work alongside The Children's Mutual to come to the best solution for all members."
Graeme McAusland, chief executive of The Children's Mutual, said: "I can confirm that the board of The Children's Mutual is considering a transfer into Forester Life.
"As a mutual society, we always look to act in our members' and customers' interests and are pursuing this aim during the next stage of negotiations.
"At this early stage, we have signed heads of agreement and have entered into a period of exclusive negotiations with Forester Life."
He also stated that current plans are to write to members regarding the merger prior to the end of the year and that plans will need approving by the Financial Services Authority (FSA).