Wednesday, 12 June 2019

Best cash Junior ISAs

If you're anything like us, sorting out kids' savings accounts might have been on your to-do list since, er, the kids' birth. 

Junior ISAs (JISAs) are tax-free savings accounts which under-18s can save or invest up to £4,368 in this tax year. We've written a totally jargon-free guide to Junior ISAs here. But once you've read that and decided to open an account, which one is the most generous? Here's our guide.

The allowance: this year you can put up to £4,368 in a junior ISA. This post is just about cash JISAs - you can also invest some or all of the allowance in a stocks and shares JISA and there's more info in our guide here.

* The owner of the Junior ISA must be under 18.

* The cash is locked away until the kid turns 18 - it can't be withdrawn beforehand.

* On their 18th birthday, the kid owns that money and can do whatever they like with it (Ferrari downpayment included..) - you, the parent or carer, ceases to have any control over it from then.

* Kids don't pay tax on savings unless they earn over £18,500 a year in interest from their savings (aka they're a REALLY successful un-box-er on YouTube, or the Milky Bar kid or..!) so for any (almost all) kids, a JISA has no major tax benefits above a children's savings account - so go for the highest rate, whether that's a normal kids' saving account (see the best ones here) or a JISA.

* Use the tax-free wrapper, or lose it: if you don't invest the full allowance this year, you can't regain it next year - although you will get a new allowance next year.

* Anyone can put money into the account, but only parents/legal guardians can open it.

So, what are the best rates?

* Paying 3.6%, top of the pile is the Coventry Building Society's junior cash ISA. You have to apply via post or in branch (although you can order an application form from the website) - but can manage the account online after opening it. You can move old JISAs into this one - called a 'transfer'.

* Paying 3.25%, is Government-backed NS&I. You can open it online and transfer old JISA allowances across.

* Also paying 3.25%, is TSB - but, big catch here: you can't open or manage online, you have to use a branch.

* All rates correct at time of writing, please check terms, conditions and details before opening any new accounts or moving your money. This website does not constitute financial advice, always do your own research and check accuracy and reliability of providers. 


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