Junior ISAs turn 8 – What is a Junior ISA and how does it work?

Junior ISAs were first introduced in November 2011 and provided a replacement to the short-lived Child Trust Fund.

The Junior ISA celebrates its 8-year anniversary on 1st November 2019 and based on the maximum contribution limits, had you opened an account back in November 2011, you could have saved £31,552 of tax-free cash. This, however, could have been slightly more or less based on the type of Junior ISA you opened.

What is a Junior ISA

A Junior ISA is a tax-efficient way of building a savings pot for your child. There are two types of Junior ISAs, a Junior Cash ISA or a Junior Stocks and Shares ISA. The lump-sum accrued over time can be accessed by your child at the age of 18.

Junior ISA features:

• In the 2019/20 tax year, a maximum of £4,368 per child can be invested in a Junior ISA and rises to £9,000 in 2020/21 (any unused allowance cannot be carried forward)
• A Junior ISA can only be opened by parents or legal guardians of the child
• Anybody can contribute to a Junior ISA once it is opened
• A child can have both a cash Junior ISA and a Stocks and Shares Junior ISA but the annual allowance must be spread between the two accounts
• Once your child turns 18 they can access the money or they can transfer it into an adult ISA

Best Cash Junior ISAs - Comparison Table

The below table shows the best cash Junior ISAs as of October 2019:

Junior ISA Provider	Junior ISA AER interest rate
Coventry BS	3.60%
Danske Bank	3.45%
Santander	3.25%
TSB	3.25%
Darlington Building Society	3.25%
NS&I	3.25%
Tesco Bank	3.15%
Halifax	3.00%
Barclays	3.00%
Family Building Society	2.75%
Cumberland Building Society	2.75%
Mansfield Building Society	2.70%
Lloyds Bank	2.50%
Wesleyan Bank	2.25%

Best Stocks & Shares Junior ISAs

The below table shows the best Stocks and Shares Junior ISAs as of October 2019:

Provider	Minimum investment	Annual charge	Dealing charge
Wealthsimple*	No minimum investment	0.7% (As a Money to the Masses reader, The first £10,000 of your money is managed for free)	Nil
Charles Stanley Direct	£500 lump sum or £50 per month	0.35%	Nil for funds
AJ Bell Youinvest	£25 lump sum or per month	0.25%	£1.50 per deal online
Hargreaves Lansdown*	£100 lump sum or £25 per month	0.45%	Nil
Bestinvest	£100 lump sum	0.40%	£7.50
Fidelity	£1,000 lump sum or £50 per month	£25 pa flat fee for less than £7,500, or 0.35% pa	Nil
Interactive Investor*	£25 lump sum or per month	£120, £168 or £240 pa (charged monthly)	£7.99 per trade, reduced if selecting £168 or £240 pa options
Vanguard Investor	£500 lump sum or £100 per month	0.15% (max £375 a year)	Nil

 

For more information on the above tables and the best providers for Junior ISAs you may find the following articles useful:

• Best Junior stocks and shares ISA (& best Junior cash ISAs)
• Junior Stocks & Shares ISA Best Buy Table

 

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 links can be used if you do not wish to help Money to the Masses - Wealthsimple, Hargreaves Lansdown, Interactive Investor