Compare Junior Investment ISA's
Investing for a child is a very important part of being a parent and doing it in the most efficient way is a sensible idea.
An ISA is a way to invest tax-efficiently. You will be able to invest up to the tax allowance each year for your child. The account can be opened by a parent or guardian and all proceeds are invested on behalf.
There are two ISA options available for young people:
Junior Cash ISA
This is a safer option than the Stocks and Shares ISA as your capital is not a risk. However, low interest rates means your savings will have limited growth.
Once the child is 18, the child will be able to access the full amount of money.
Junior Stocks & Shares
These ISAs allow you to invest for your child. As long as the child doesn’t already hold a child trust fund, they can be opened by the child’s parent or guardian with the proceeds being invested on behalf of the child. The funds have to be invested for at least 5 years, so if your child is over 13, a Junior Stocks & Shares ISA might not be suitable.
Once the child reaches 18, the plan can be cashed in or transferred to an adult ISA, but the plan cannot be accessed or cashed in before this time.
In these plans your capital is not protected meaning there can be fluctuations in the capital value of the plan, which can vary dependent on the risk category of the funds invested in. This means that there is a risk that the plan may not be worth as much as has been paid in on maturity.
Some Popular Junior ISAs
Hargreaves Lansdown Junior ISA
- Opening an account online takes less than five minutes, and you can start from just £25 per month or a £100 lump sum
- You can view and manage your child’s investments online or using Hargreaves Lansdown's award-winning app, and see all of your family accounts in one place
- Friends and family can contribute through regular or one-off payments (up to the current £4,368 limit for the 2019/20 tax year)
- A wealth of expert investment research is available, helping you make the most of this investment in your child’s future
- Existing Child Trust Funds can be easily transferred into Hargreaves Lansdown Junior ISAs
Fidelity Stocks and Shares Junior ISA
This account allows you to hold your investments in cash. This means if you're concerned about the market's prospects you can shelter your money in cash, then move it quickly and easily to investments when you believe the markets have more potential
- View and manage the account online, 24 hours a day with our online Account Management service
- Once set up, anyone can contribute to a child’s account at any time, up to the annual limit
- The money is invested and locked away until the child is 18. When the child is 18 it becomes their ISA and they assume full control
- A full range of investments to choose from