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Junior ISAs? Child’s play when you know how!

Junior ISAs? Child’s play when you know how!

Category: ISAs

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

It's hard to believe a year has passed since the launch of Junior Individual Savings Accounts (JISA), a mini version of the standard adult ISA.

Replacing the state assisted Child Trust Funds, JISAs allow parents, grandparents, guardians and family friends to provide a financial buffer for their little ones.

Here are some quick tips on how you and your child can benefit most from Junior ISAs:

How do Junior ISAs work?

Junior ISAs are a tax-free savings account designed to let adults invest up to £3,600 a year in a child's future.

The three main 'rules' of Junior ISAs are:

  • The child must be aged under 18.
  • The child must reside in the UK.
  • The child must not be eligible for a Child Trust Fund (CTF).

There are two kinds of Junior ISAs:

  • Cash ISAs. These accounts allow parents to invest cash for their children, without paying tax on the interest.
  • Stocks and shares ISAs. Cash is invested in the stocks and shares market and any capital gains and dividends will not be taxed.

Unlike CTFs, the Government makes absolutely no financial contributions towards Junior ISAs.

What difference does being eligible for a CTF make?

The Government states that children born between 1 September and 2 January 2011 will not be entitled to a Junior ISA as they will remain eligible for a CTF.

Any funds from a CTF cannot be transferred into a Junior ISA.

Can a new Junior ISA be opened each year?

No, although the total balance can be transferred to a new provider if you are not happy with your current one.

A cash and stocks and shares Junior ISA can be opened to run alongside one another.

Can I invest more than £3,600?

No, the maximum that can be invested into a Junior ISA each tax year is £3,600. The tax year runs from 6 April of the current year to 5 April the following year.

Can I withdraw the funds in my child's Junior ISA?

Absolutely not. Whilst adults can place funds in, only the child can access funds.

What happens when the child turns 18?

Funds in a Junior ISA can only be accessed by the child once they turn 18, not before. Funds can be either withdrawn or transferred to an adult ISA upon maturity.

Top two Junior ISAs available today: correct as at 01/11/12

Provider AER Term
Minimum deposit More Info
Coventry BS
Junior Cash ISA


Variable rate

18 years old


Maximum age: 17 years

This bank/building society shares its £85,000 compensation limit with: Stroud & Swindon BS



Nationwide Building Society
Smart Junior ISA


Variable rate
18 years old


15 years

This bank/building society shares its £85,000 compensation limit with: Cheshire BS, Derbyshire BS, Dunfermline BS.

Rate includes 1.15% bonus until 31.01.2014




Rates quoted are based on Moneyfacts.co.uk Junior ISA Best Buys correct as at 01/11/12.

View six best buy Junior ISAs with up to the minute rates - Compare the best Junior ISAs

2012-13 Junior ISA allowance

In the 2012-13 tax year (which runs from 6 April 2012 to 5 April 2013) you can save or invest up to £3,600 in a 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.