Find our best junior ISAs
Save tax-free for your child's future
What is a junior ISA?
A junior ISA is a long-term and tax-free way for parents or guardians to invest or save money for their child's future.
The money you add into this savings account is locked away. Your child can take control of the account and manage it from age 16, but cannot access it or withdraw funds until their 18th birthday.
How does a junior ISA work?
Currently, every child has a junior ISA allowance of £9,000 per tax year which can be used during the tax year. This is the maximum amount that can be put into their ISA across the tax year and this allowance is reviewed annually by the government.
You don’t have to put the full amount in – the £9,000 is just a maximum. A child can only have one junior cash ISA and one junior investment ISA at any one time.
What are the two types of junior ISAs?
What are the two types of junior ISAs?
Junior stocks and shares ISA
This offers the potential for a greater return over the long term. However, your child's money will also be subject to stock market volatility, meaning there is some risk attached. It doesn’t offer variable or fixed interest rates, instead, it offers you a return based on the performance of a particular investment fund, market, or company.
Junior cash ISAs
These are cash-based deposit savings accounts paying either fixed or variable interest rates. So, the amount of money you put into them for your child should never go down. However, as savings rates may be lower than inflation, the actual value of your savings could be eroded over time.
How to choose a junior ISA
If you are not sure where to begin with choosing a junior ISA, following these three steps should help.
Have a savings goal
Terms and conditions
Apply
Our best junior investment ISAs
Our editors pick these deals by weighing up factors such as the minimum initial lump sum and/or monthly deposit, as well as the choice of funds available.
Capital at risk. Junior ISA rules apply.
“This ISA is a good option if you want a low-cost way of investing for your child’s future. The initial deposit is £100. You can then add monthly contributions starting from just £0. You can manage your family’s account in one place via the website or app.”
What should I consider when looking for a junior ISA?
The best junior ISA for you will depend on a variety of factors, including:
How much you have to invest – most junior ISAs can be opened with just £1, although this is worth checking as some providers ask for more
Your attitude to risk – generally speaking, if you’re very risk averse, you’ll probably be more comfortable with a cash junior ISA for your child. However, stocks and shares junior ISAs should beat cash accounts over time
Your ethical stance – if you are concerned about the environment, for example, you may want to use your junior ISA to invest in sustainable assets, such as an ESG (environmental, social, and governance) focused investment fund
Pros and cons
Pros
Cons
Why would you put money into a junior ISA rather than a children's savings account?
The headline advantage of a junior ISA is that interest or investment returns are tax free. However, most children will not pay tax on their income anyway, so you’re better off going with the best rates you can find. For savings, this is often via a children’s savings account rather than a junior ISA account.
There are some exceptions to this:
If your child already earns an income
If your child is earning an income, then they have a personal savings allowance that lets them earn up to £1,000 a year in interest without paying tax. But if they’re a higher-rate or additional-rate taxpayer, this allowance tapers away – eventually to nothing. If your child is earning more than the allowance in interest, for instance on savings built up over their whole childhood, an ISA might therefore be more tax efficient.
If they’ll earn more than £100 a year in interest from money gifted from parents or step-parents
Money that’s gifted from parents or stepparents has slightly different rules to savings gifted by other family members or friends.
Any cash in normal non-ISA savings accounts that earns more than £100 in interest per year will be taxed at the parent’s marginal rates. If the parent is still within their personal savings allowance, and the child’s savings don’t breach this, then the money is still tax free. However, once that limit is breached, then the whole savings pot interest will be taxed at the parents’ rate.
If you are planning on saving for your children, and you think you might breach the limits, you’re therefore better off with an ISA where the money is protected. It’s complicated, so consider seeing an independent financial advisor to ensure you make the right choices.
If you want to lock the money away
Children can’t access their junior ISAs until they’re 18, so it’s an easy way to stop them – and you – spending the money during that time. However, once they turn 18, they can do what they want with the money.
If you want the money invested
If you’re saving for the long term, usually at least five years, then you should consider investing the money to beat inflation. The easiest way to do this is with a stocks and shares junior ISA.
If the ISA rates are better
If you can find a junior ISA that’s paying higher interest than other children’s savings accounts, then you should snap it up. There aren’t any disadvantages to choosing an account offering the best junior ISA rates, unless you think your children will need their savings before 18.
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