Natwest Junior ISA

Natwest Junior ISA

A Junior Stocks and Shares ISA is a way of investing for your children in a tax-efficient fund, where you can invest up to £9,000 for the 2021/22 tax year. The funds in the account are in the name of your child and belong to your child but they won’t be able to withdraw any funds until they reach the age of 18. When they reach 18 years of age the Junior Stocks and Shares ISA will convert to an adult ISA, with the child being the owner. At this point they will be able t do whatever they like with the money.

The Natwest Junior ISA is open to children under the age of 16. However, if your child already holds a Child Trust Fund, they can't also open a Junior ISA, but the Child Trust Fund can be transferred to a Junior ISA by following the standard transfer procedure.

Natwest Junior ISA Features

It’s important to note that Junior ISA investments are linked to shares so the value of the account could fall as well as rise, and your child may get back less than has been invested.

However, Junior Stocks and Shares ISAs are tax efficient and there is no capital gains tax and no UK income tax to pay on the income on investments within a Junior ISA and it is possible to make gain higher returns than with a standard Cash ISA.

There are two ways to setup a Junior Stocks and Shares ISA with NatWest:

1. Set up a direct debit for a minimum £20 per month
2. Invest a lump sum of £250

Why Invest in a Junior ISA?

1. The potential for higher returns. The NatWest Junior ISA invests in stocks and shares and so offers the potential for better returns than a Junior Cash ISA over the long term. Unlike a Junior Cash ISA, the NatWest Junior ISA can go down in value as well as up. The growth or income it generates each year can also fluctuate, unlike Junior Cash ISAs which receive a set rate of interest.
2. Charges – There are no upfront charges, and the ongoing charge is capped at 1.5 % per year
3. Top up the investment – you can save regularly with a Direct Debit or, you and your friends or relatives can make additional investments from as little as £1 a time, up to a limit of £9,000 for the 2021/22 tax year. This creates an easy way for a family to save for a child’s future.