Halifax Junior ISA

Halifax Junior ISA

What is a Junior ISA?

They are an initiative by the government to encourage and help parents to save for their children’s futures. It was launched in 2011 and both tax-free savings and investment ISAs are available.
You’re able to have one of each type of ISA per child and transfers are permitted between the two or to a new provider, much like adult ISAs.

Halifax Junior ISA Review

Halifax is a British bank operating as a trading division of Bank of Scotland, itself a wholly owned subsidiary of Lloyds Banking Group.

This is a Junior Cash ISA so your savings aren’t going to decrease and you’re guaranteed some sort of interest. Junior Investment ISAs carry more risk but may provide better returns.

Features:

1. High variable interest rate
2. Interest paid annually on the 5^th April
3. Long term tax-free savings account for under-18s
4. Deposits can be made by anyone
5. Opening balance of £1

Useful to Know

1. If you already hold a Child Trust Fund you can only apply for the Junior ISA in branch
2. The account must be opened by and adult with parental responsibility if the child is under 16
3. You can’t view the account on your online banking profile
4. Withdrawals are not permitted until the child reaches the age of 18

Who Can Open a Junior ISA?

ISAs can be opened by anyone who has parental responsibility for an eligible child. Management of the ISA passes to the child when they turn 16. However, funds remain inaccessible until the child turns 18, after which they can either withdraw the funds, or have their account roll over into an adult ISA. 

It’s worth taking in to account that you no longer have any control over the money once they child receives it and therefore, if you have a specific savings goal for the money in mind then it may be best to open a savings account in your name.

What are the rules surrounding Junior ISAs?

Junior ISAs operate on a similar principle to regular adult ISAs. It's permissible to switch providers, but only one of each type of Junior ISA can be held by each child at a time. Unlike Child Trust Funds, Junior ISAs don't involve any Government contribution. 

Each year there is a Junior ISA allowance. This allowance can either be put into a Junior cash ISA or divided between a Junior Stocks and Shares ISA and a junior cash ISA in whatever proportion you wish. The money will automatically pass to the child when it reaches 18 but no withdrawals are permitted before then.

What are the advantages of junior ISAs?

1. Junior ISAs provide parents, friends and family members with a convenient, tax-efficient way to save for a child's future
2. The money saved in a junior ISA stays tax-free once the child reaches the age of 18
3. The money is locked away until the child turns 18
4. If you want to save an annual amount for your child that generates over £100 in yearly interest, a junior ISA ensures that this interest isn't taxed