Don't let your child trust fund (CTF) voucher gather dust earning no interest or growth. By now all vouchers should have been issued for children born before May 2005. Many of these seem to have been filed in the 'deal with later' pile, a common destination for Inland Revenue correspondence.

If you have not invested your child's CTF voucher yet, you are probably in the majority. Research published by Sainsbury's Bank in April 2005 suggested that three out of four vouchers had yet to be turned into investments. That delay could be costing your child money, because until the voucher is converted into a CTF investment, there can be no growth. The voucher itself is relatively small beer — most will be £250 plus a small interest compensation element — but that is not the whole story.

It is possible for you and/or friends and relations to add up to £1,200 a year to your child's CTF. CTFs have the same tax treatment as ISAs — no income tax on interest, no higher rate tax on dividends and no capital gains tax. Above all, you do not need to worry about the rules that mean the income from substantial gifts by parents to their children is taxed on the parents. Of course, tax rules can change.

To make matters worse, one year's top-up opportunity may disappear completely because of the way CTF's timings operate. Top-up years start with the child's birthday, so if your child has a birthday after 5 April 2005 but before you open their CTF, you will have missed one £1,200 top-up opportunity.

Opening the CTF swiftly is important, but this does not mean you should rush to the nearest bank or building society without seeking advice. The evidence suggests that most CTFs will be deposit accounts, which could be another missed opportunity. A CTF is a long-term investment — it will not mature until your child reaches 18.

Over such a period, it may make sense to invest in something with real growth potential, such as share-based investments, rather than cash deposits (see 'A Long Term View of Investment Choices'). While values may go up and down and it is possible you may not get back a significant proportion of your investment, the timescale means most short-term fluctuations do not really matter. Once the money has been invested in the CTF, it cannot be returned to the donor and it cannot be withdrawn until the child reaches 18.

There are 30 CTF providers according to the Inland Revenue and there is a range of funds and fund managers. To make the right choice, we can only repeat what the Inland Revenue says: 'If parents are unsure as to the suitability of a provider or their accounts they should seek independent advice'.

And please, do it now, not later. Levels, and bases of, and reliefs from taxation are subject to change.