What is a Junior ISA?
This week marks the 10th anniversary of the Junior ISA. Junior Independent Savings Accounts (also called ‘JISAs’ or ‘Junior ISAs’) are a type of long-term, tax-free savings account specifically designed for children. They were introduced on 1 November 2011 to replace Child Trust Funds.
Who can get a Junior ISA?
In order to qualify for a Junior ISA, the recipient child must be both:
- Under the age of 18
- Living in the UK
If the recipient child lives outside of the UK, they can only qualify for a Junior ISA if both the following apply:
- Their parent/guardian is a Crown servant (in the armed forces, for example)
- The child depends on their parent/guardian for care
How do Junior ISAs work?
The money in a Junior ISA legally belongs to the recipient child, but must be managed by a parent/guardian until they turn 16. The child can then take control of the account, but they cannot withdraw the money until they turn 18, at which point their money is automatically transferred into an adult ISA.
What are the different types of Junior ISA?
There are two different types of Junior ISA - a Junior Cash ISA and a Junior Stocks and Shares ISA.
Junior Cash ISA: Similar to a standard ISA, where you do not have to pay tax on the interest your account earns.
Junior Stocks and Shares ISA: Similar to a standard Stocks and Shares ISA, where the money in the account is invested and you do not have to pay tax on any gains or dividends you earn.
What is the Junior ISA limit?
A child can have one or both types of Junior ISA as long as their cumulative value does not exceed the annual Junior ISA savings limit, which is £9,000 for the 2021/22 tax year.
Best Junior Cash ISAs
|Provider||The Loughborough Building Society||The Family Building Society||Coventry Building Society||Tesco Bank||Halifax|
|Account name||Junior ISA||Cash Junior ISA (1)||Junior Cash ISA (2)||Junior Cash ISA||Junior Cash ISA|
|Minimum opening balance||£1||£3,000||£1||£1||£1|
|How to manage the account||Branch, Post||Branch, Post, Telephone||Branch, Online, Post, Telephone||Online, Telephone||Branch|
|How to apply||Branch, Post||Branch, Post||Branch, Online, Post, Telephone||Online, Telephone||Branch, Online|
|Financial Services Compensation Scheme||Own Licence||Shared Licence||Own Licence||Own Licence||Shared Licence|
Source: savingschampion.co.uk, 01/11/21.
Best Junior Stocks and Shares ISAs
|Provider||Vanguard Investor||AJ Bell||Charles Stanley Direct||Fidelity||Hargreaves Lansdown|
|Account name||Junior Stocks and Shares ISA||Junior ISA||Stocks & Shares Junior ISA||Stocks and Shares Junior ISA||HL Junior Stocks and Shares ISA|
|Minimum investment||£500 lump sum or £100 per month||£25 lump sum or £25 per month||£500 lump sum or £50 per month||£1,000 lump sum or £50 per month||£100 lump sum or £25 per month|
|Annual charge||0.15% (max £375 a year)||0.25%||0.35%||No charge for Junior accounts||0.45%|
|Dealing charge||£0||£1.50||£0 for funds||£0 for funds||£0 for funds|
More on ISAs
You can find out more about ISAs and which one may be best for you in the following articles: