Best Junior stocks and shares ISA

8 min Read Published: 20 May 2024

Top stocks and shares Junior ISA provider (& best Junior Cash ISAs)

best stocks and shares junior ISA
Find the best stocks and shares junior ISA

Most parents are keen to give their children the best start in life and saving for their future can play a big part in their plans. Investing in a Junior ISA can currently provide a tax-efficient way of building up a lump sum to give your children a great start on their journey into adulthood. But a Junior ISA doesn't have to mean a savings account paying a low interest rate. In fact, you can also invest in the stock market via a Junior Stocks and Shares ISA.

In this article, we compare the best Junior ISA providers as well as providing a list of the best Junior Cash ISA rates in the UK.

1 minute summary - Best Junior stocks and shares ISA

  • You can invest up to £9,000 per child for the 2024/25 tax year
  • You can invest in a Junior Cash ISA, a Junior Stocks and Shares (Investment) ISA or a combination of both (but you cannot exceed the £9,000 per child annual Junior ISA allowance)
  • Wealthify* is our top pick when it comes to the best Junior Stocks and Shares ISA. It is currently running an offer where you pay no management fees for 12 months when you invest in a Junior ISA*. New customers only. Terms and conditions apply, capital at risk. The tax treatment of your investment will depend on your individual circumstances and may change in the future. Leadenhall Learning Limited (trading as Money to the Masses) is an appointed representative of Wealthify Limited which is authorised and regulated by the Financial Conduct Authority. Money to the Masses acts as an appointed representative for the purpose of promoting Wealthify products and introducing customers to Wealthify.
  • Alternatively, parents wanting to choose their own investments should look at Hargreaves Lansdown*
  • Coventry Building Society currently offers one of the best Junior Cash ISAs with a rate of 4.95%

The Best Junior ISAs

Below we provide our overall top picks when it comes to the best Junior Stocks and Shares ISA and also the best Junior Cash ISA.

Overall Best Junior Stocks and Shares ISA provider

Wealthify

Wealthify Junior Stocks and Shares ISA*

  • Invest from as little as £1
  • Simple, low-cost fee of 0.60%, plus average investment costs of 0.16% for Original Plans and 0.70% for Ethical Plans
  • Wealthify is good for people who don't want to pick investments themselves and would prefer someone else to invest and manage a Junior ISA for them. Other Junior Stocks and Shares ISAs in this article require you to choose the underlying investments yourself
  • You can choose to invest in ethical funds
  • Choose one of 5 investment styles
  • Leadenhall Learning Limited (owner of Money to the Masses) is an introducer appointed representative of Wealthify Limited which is authorised and regulated by the Financial Conduct Authority.


Overall Best Cash Junior ISA provider

Coventry Building Society

Coventry Building Society

  • Currently paying a rate of 4.95% (AER variable)
  • Open an account with just £1
  • Interest paid annually
  • Account can be opened via post or in branch

Compare Top Junior stocks and shares ISAs

Below is a list of the leading Junior Stocks and Shares ISA providers in the UK. To make it easier to compare providers, we've included the minimum investment required to invest as well as the annual platform charges and any charges for buying and selling investments.

Provider Minimum investment Annual charge Dealing charge
AJ Bell* £25 lump sum or £25 per month 0.25%
£1.50 per deal online
Beanstalk* No minimum 0.50% N/A
Bestinvest* £50 0.40% up to £250,000 – fee reduces as you invest more. No charge for assets over £1m Nil for funds
Charles Stanley Direct No minimum 0.35% Nil for funds
Fidelity £1,000 lump sum or £25 per month No charge for Junior accounts Nil for funds
Hargreaves Lansdown* £100 lump sum or £25 per month No charge for Junior accounts Nil for funds

Nil for shares

Interactive Investor* Any lump sum or £25 per month No additional charge for Junior accounts if already an Interactive Investor customer – plans are £4.99, £9.99 or £19.99 (charged monthly)
£3.99 per trade
Moneyfarm* £500 or £10 per month 0.75% up to £10,000 – fee reduces as you invest more, potentially reducing to as low as 0.35% N/A
Vanguard Investor £500 lump sum or £100 per month 0.15% (max £375 a year) Nil
Wealthify* £1 0.60% N/A

The Best Junior Cash ISA rates

The table below shows the best Junior Cash ISA rates in the UK.

Junior ISA Provider
Junior ISA AER interest rate
Bath Building Society 5.49%
Coventry BS 4.95%
The Loughborough Building Society 4.80%
Skipton Building Society 4.75%
Stafford Railway Building Society 4.75%
Leek Building Society 4.75%
Family Building Society 4.60%
Mansfield Building Society 4.50%
Darlington Building Society 4.45%
Cumberland Building Society 4.35%
Dudley Building Society 4.25%
Monmouthshire Building Society 4.15%
NS&I 4.00%
Tesco Bank 4.00%
Danske Bank 3.80%
Halifax 3.65%
TSB 3.65%
Santander 3.20%
Lloyds Bank 3.15%

Updated 20.05.24

Junior Cash ISA VS Junior Stock & Shares ISA – pros and cons

Type of Junior ISA  Pros Cons
Junior Cash ISA Capital is not at risk as money is held in cash Poor savings rates which limit growth
Junior Stocks & Shares ISA Prospect for much greater growth by investing your money Higher charges, Capital will rise and fall with investment markets

With interest on cash savings likely to fall in the coming months, it makes sense to look at ways of improving the return on your investment. Investing in equities has proven over the long term to outperform cash savings. Equity-based investments have averaged around 5% return a year. That is in no way guaranteed and you could end up with less money than you originally invested. However, the longer your investment timeframe the more likely you are to make a profit.

Saving into a Junior ISA does not have to mean investing in individual stocks and shares, which can be very risky. You can instead invest in investment trusts and funds which are basically a basket of shares bought to reflect the investment aims of the investment trust's mandate. Investing in investment trusts/funds can help create a balanced portfolio, therefore reducing the risk level of your investment.

What is a Junior ISA?

A Junior ISA is a long term tax-free savings account designed to provide a lump sum for a child when they reach the age of 18 years old.

There are two types of Junior ISA:

  • Junior Cash ISA – where the money is held in cash and interest is added during the term
  • Junior Stocks and Shares ISA – where money is invested in equity markets with the aim of obtaining a better return at the end of the term. It is possible to invest in assets other than equities too, such as bonds or funds with a mix of assets.

How much can you invest in a junior ISA?

The maximum that can be invested in a Junior ISA is £9,000 per child for the 2024/25 tax year. Any previously unused Junior ISA allowance cannot be carried forward into a subsequent tax year. The Junior ISA allowance is not fixed and can change from tax year to tax year. Junior ISA contributions can only be made until the child reaches their 18th birthday.

Who can set up a Junior ISA?

A Junior ISA can only be opened by parents or guardians with parental responsibility for the child.

Who can contribute to a Junior ISA?

Once a Junior ISA is open anybody can contribute, including grandparents.

What is the difference between a Junior ISA and a Child Trust Fund?

A Child Trust Fund is a long term savings account for children and whilst contributions can still be made to existing Child Trust Funds, new accounts were stopped in 2011 and replaced by Junior ISAs. After the Government contributions to Child Trust Funds were stopped, the number of providers, investment fund availability and interest rates dropped on these products. Originally money in a Child Trust Fund could not be transferred to a Junior ISA, stopping millions of parents from enjoying the better investment options and interest rates available via a Junior ISA. However this rule changed in 2015 and parents can now transfer existing Child Trust Funds into a Junior ISA. To transfer a Child Trust Fund to a Junior ISA you simply need to choose a Junior ISA and note the request on your application.

What happens to a Junior ISA when a child reaches 18?

A Junior ISA matures when the child reaches the age of 18 and the proceeds are either paid to the child or transferred into an adult ISA for them.

Why should I consider a Junior Cash ISA or Junior Stocks and Shares ISA?

If you are trying to build up a sum of money to provide for your child as they enter adulthood then the tax-free status of a Junior ISA is a great investment vehicle. If you start investing/saving when your child is young the greater the eventual value is likely to be when your child reaches age 18. In addition, you can open a Junior ISA from as little as £1 for either a Junior Cash ISA or Junior Investment ISA.

The one disadvantage of using a Junior ISA to save for your child's future is that they are entitled to the proceeds once they reach the age of 18, whether you want them to get their hands on it or not and you have no control over how they spend the money. For most people that isn't a problem. However, if you are concerned about it then you could save via a normal ISA in your name and then gift the money to the child when you want to. Of course this does mean that you use up a portion of your own annual ISA allowance in doing so. We provide a separate roundup of the best cash ISAs and the best Stocks and Shares ISAs.

Things to consider when investing in a Junior stocks and shares ISA

When comparing Junior stocks and shares ISAs you need to decide where you want to invest, either in funds or stocks and shares. You also need to consider the charges as well as any additional tools or research and the customer service on offer. We explain more below:

Funds

Most investors choose funds as they invest in a basket of stocks, shares, bonds and other investments in line with the investment aims of the chosen fund. Actively managed funds have a fund manager who chooses the underlying investments whereas a passive fund will just broadly reflect an index such as the FTSE 100. Whichever you choose it is preferable to pick a stocks and shares Junior ISA with low charges as shown above. The underlying funds you invest in will levy their own charges but these are fairly consistent across all the Junior ISA providers.

Shares

If you are looking to invest directly in stocks and shares then this will limit your choice in terms of the best Junior stocks and shares ISA for your circumstances. Some Junior stocks and shares ISA providers do not offer the stockbroking facilities required to buy shares directly. It must be noted that investing directly in stocks and shares is a riskier investment strategy and while this may prove profitable the risk of losses are greater.

There are a number of other things you need to check when choosing a Junior stocks and shares ISA.

Customer service

There has been a mini-explosion in recent years in new Junior ISA providers and this has resulted in a variety of offerings from these new providers. To keep costs low, and attract new customers, some Junior ISA providers are offering a stripped-back level of customer service, which may not meet your requirements, so make sure you check the offering carefully before investing.

Tools and research

You may want to keep an eye on your investments on your smartphone or read some up to date investment research. This could dictate the provider you choose. The tools and research offered vary greatly across the various Junior ISA providers so check these out to make sure they offer what you are looking for.

Charges

There are a host of charges that Junior ISA providers levy and the level of these charges can impact your investment returns over time.

These charges can include:

  • transfer charges
  • dividend reinvestment fees
  • buying charges
  • selling charges
  • fund switch charges
  • bid/offer spread
  • fund manager charges
  • platform charges
  • transfer out fees

 

If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers – Wealthify, Hargreaves Lansdown, Interactive Investor, Scottish FriendlyFidelity, Bestinvest, Moneyfarm, AJ Bell