Nationwide Junior ISA
What is a Junior ISA?
Junior ISAs are a great tax-efficient way to save for your children’s future. Launched in November 2011 by the Government, they offer easy tax-free savings and investments. Each child is able 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.
Nationwide Junior ISA Review
Nationwide Building Society is a British mutual financial institution and the largest building society in the world.
- You can manage this account with online banking
- Can be opened online with a minimum of £1
- Can be topped up using a Nationwide Current Account or Instant Access Savings Account
- You are unable to withdraw money until the child turns 18
- Transfers in and out are permitted
- High variable rate of interest
- Interest paid annually
This ISA is particularly useful due to the online banking facility. However, if you don’t have a Nationwide account and don’t want to open one then you may have trouble paying money in to the account.
Who Can Open a Junior ISA?
One ISA can be opened per child and can be opened by anyone with parental responsibility over the 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. The child assumes full responsibility of the money at 18, which could prove problematic if you have a specific savings goal in mind.
What are the Rules surrounding Junior ISAs?
In terms of rules and regulations, Junior ISAs are very similar to regular adult ISAs. You can transfer between providers and the allowance can either be put into a Junior Cash ISA or divided between a Junior Investment ISA and a junior cash ISA in whatever proportion you wish.
Unlike Child Trust Funds, Junior ISAs don't involve any Government contribution. Each year there is a Junior ISA allowance.
What are the Advantages of Junior ISAs?
There are several advantages for choosing a Junior ISA over a savings account:
- Junior ISAs provide parents, friends and family members with a convenient, tax-efficient way to save for a child's future
- The money saved in a junior ISA stays tax-free once the child reaches the age of 18
- The money is locked away until the child turns 18, which stops your teenager from being tempted into spending it on unimportant items
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
What are the Disadvantages of Junior ISAs?
Once your child reaches 18, the money is theirs to spend or save as they wish. If you've got a specific savings goal in mind for your child - for example, a mortgage deposit - you might be better off setting up a savings account in your own name so that you can ensure the money is used for the purpose you originally intended
Important Risk Information:
This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.
Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.
Stocks & Shares ISAs
Types of Stocks and Shares ISA include:
Stocks and Shares ISAs
Latest News
Investment ISA Pros and Cons
7th August 2020
The tax-free returns offered by an Investment ISA (otherwise known as a Stocks and Shares ISA) can be very tempting at first glance - however, as with any investment, it is important to weigh up the pros and cons. So we've put together a list of what you need to consider before opening your own Stocks and Shares ISA account.
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