Today marks the first opportunity for parents to open Junior ISAs for their children.
Around six million children will be eligible for the new accounts, with around 800,000 children benefiting each following year.
All children under 18 who are UK residents and do not have a Child Trust Fund (CTF) will be eligible for a Junior ISA.
"The launch of Junior ISAs is a clear demonstration of the Government's commitment to encourage saving for children. Junior ISAs will be open to all parents, regardless of income," said Mark Hoban, Financial Secretary to the Treasury.
Children will be able to hold a cash ISA and stocks and shares ISA with a combined annual limit of £3,600.
Like their grown-up equivalents, the accounts will be sheltered from tax.
Children will be able to control their accounts from 16, but will not be able to access the funds for another two years.
The new accounts will effectively replace CTFs, although unlike them, the Government will not pay anything into Junior ISAs.
Limits for CTFs will also be increased from £1,200 to £3,600 a year to bring them into line with the new accounts, although CTF balances cannot be transferred into a Junior ISA.
However, Danny Cox of Hargreaves Lansdown said that the six million children in the UK with a CTF could potentially be left with inferior products.
"We think Child Trust Fund and Junior ISA rules should be aligned and then merged into one, just like PEPs and ISAs were," he added.
"We have taken this up with the Treasury."
All of the high street's biggest names are expected to launch their own versions of the Junior ISAs, so keep an eye on Moneyfacts.co.uk for the best of these new tax-efficient children's accounts.
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