Junior ISA Rates
What is a Junior ISA
Junior ISAs are an initiative by the Government to help parents save for their children's future. Launched in November 2011, Junior ISAs offer tax-free savings and investments. Each eligible child is allowed to have one cash ISA and one stocks and share ISA at any time. Transfers are permitted between cash and stocks and shares Junior ISAs, or to another Junior ISA provider.
Children who were born between 1st September 2002 and 3rd January 2011 will already have a Child Trust Fund, and are therefore not eligible for a junior ISA but you are able to transfer in to a Junior ISA. Talk to your provider for more details or use our comparison tables to find a provider who will except transfers in.
Cash ISA Interest Rates
The interest rates of a cash ISA determine the amount of interest that can be gained from the ISA's deposit. An interest rate is a percentage multiplier under which a gain is made on a certain amount of deposit. Cash ISA interest rates are either variable or fixed and that is dependent on the type of account.
Junior ISAs require that you tie up the money long term, specifically until the child turs 18. This makes them slightly different from the usual ISA as this sort of account would normally be at a fixed rate of interest yet most Junior ISAs are at a variable rate. There are some exceptions, check our tables for interest rates and more information.
Variable Interest Rates
In variable interest rates, the rate is not pre-determined and does not remain fixed throughout a set term. Usually, the bank or credit institution depending on certain factors such as the Bank of England Base Rate, determines the rate. The rate can therefore either be high or low at any given time.
Fixed Interest Rates
The exact opposite of variable interest rates, fixed interest rates are pre-determined and do not change over time. Regardless of circumstances in the wider economy or other scenarios that could affect interest on a deposit, the rate remains at it set standard. Some Junior ISAs who offer Fixed Rate accounts include: Halifax, Santander, and Nationwide.
Transfers
You can transfer in to a Junior ISA just like an adult ISA.
Switching is permitted and as long as your check that your current provider accepts transfers-in then it should be just a case of filling in a form.
If you have a Child Trust Fund set up then you’re not allowed to open a Junior ISA as well. However, you can transfer the Trust Fund in to the ISA.
Junior Stocks and Shares ISA Rates
Rates for the Stocks and Shares ISA are more unpredictable because investments traditionally fall as well as rise. Generally, your returns are much higher than a standard Cash ISA. Investments can include stocks and shres as well as bonds and property.
