Today marks the second anniversary of the Junior ISA market, with new research showing that for the first time the majority of parents are aware of these tax-free savings vehicles.
According to Family Investments, 57% of parents are now familiar with Junior ISAs, compared to just 27% when they were first launched in 2011 and 44% last year.
On top of this, HMRC figures reveal that sales of Junior ISAs have jumped by 315% over the last two years, from 71,000 in the 2011/12 tax year to 295,000 in 2012/13.
Junior ISAs are much like their adult counterparts in that interest earned is not taxed.
There are two types – cash and stocks & shares – which are available to children up to the age of 18 who do not qualify for a Child Trust Fund (CTF).
Up to £3,720 can be invested in a Junior ISA for the 2013/14 tax year. This can be split between cash and stocks & shares, or fully invested in either.
They can be opened by parents and grandparents on behalf of a child.
Two key differences between adult ISAs and Junior ISAs:
Compare Junior ISAs
Read our guide on Children's Savings to find out more about the difference between a CTF and Junior ISA
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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