The gap between the best and worst child trust fund (CTF) deals has widened, research shows.
Average interest rates on cash CTFs have risen by 1.19 percent in the past year to 6.34 percent, according to price comparison site MoneyExpert.com.
But a savings price war has widened the gap between the best and worst rates to 2.75 percent from 1.75 percent a year ago.
Based on these rates, someone who invests the full annual allowance of 1,200 pounds in a CTF in the first year alone would miss out on interest of 1,780 pounds over 18 years, or 12,164 pounds if they invested the full amount in every one of the 18 years.
Sean Gardner, chief executive of MoneyExpert.com, said: The rise in the Bank of England base rate over the past year has sparked something of a savings price war, and that has extended to child trust funds.
If you are careful there's nothing to stop you from getting a great deal.
However, there are some poor deals out there and parents should move -- or risk a nasty conversation when their child turns 18.
The top rate is currently 8 percent from the Hanley Economic Building Society, while the lowest headline rate on the market is 5.25 percent with Abbey.
Parents of children born on or after September 1 2002 receive a 250-pound CTF voucher to invest in a cash or equity-based CTF on their child's behalf.
The government will make further payments into CTFs when children turn seven and is consulting on a third payment when they start secondary school.
Parents can also top them up to the tune of 1,200 pounds per year until the accounts mature when children reach 18.