The best ISAs for under 18s whether you want to invest or save cash
Junior ISAs (JISAs) are tax-free savings or investment accounts for children under 18. A parent or guardian can set them up if they’re under 16, or the child can set it up on their own if they’re 16 or 17, although they won’t be able to invest until they’re 18.
You can invest or save up to £9,000 per year in a Junior ISA, and anything you earn on it is tax-free.
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Here at Be Clever With Your Cash, we’re not regulated to give you financial advice. We aim to give you the facts about a provider or investment but it’s up to you to decide if it’s suitable for you. If you’re looking for more personalised guidance, find a financial adviser who can give you specific advice. Remember that your capital is at risk when investing — don’t invest more than you are prepared to lose.
These Junior ISAs are for investing towards your child’s future. You can choose to either invest in a ready-made option, which is a portfolio that is created and managed by experts, or you can opt for DIY investing, which is where you create and manage the portfolio yourself. Some providers offer both options.
Our top picks
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Best Junior Cash ISAs
These Junior ISAs are for saving cash. They’ll earn a set rate of interest that’s fixed or variable. These are the best-paying Cash JISAs right now.
What is a Junior ISA?
A Junior ISA is an account for children under the age of 18 to help you save for their future. There are two versions – a cash one and a Stocks & Shares one – and you can have one or both types.
Junior ISAs are a really good way to save for your child over the long-term. No one can make withdrawals, not even the parents or guardians, so the money is locked up until the child turns 18. At 16, they can manage the account themselves but they can’t actually access the money until their 18th birthday.
Who can open a Junior ISA?
Parents and guardians can set up the account and manage it on their child’s behalf or the child and anyone can pay into the account – family, friends or neighbours, for example.
Or, the child can open the account themselves if they’re 16 or 17. However, they won’t be able to invest their money until they’re 18.
What is the Junior ISA allowance?
You can pay up to £9,000 into a Junior ISA each tax year.
What happens to a Junior ISA when the child turns 18?
At 18, your child’s Junior ISA will be converted into an adult ISA – either a cash ISA or Stocks & Shares ISA, depending on the Junior ISA.
Your child will then be responsible for managing the account, making investments if they want to, transferring providers and they can also access the money as and when they please.
This can be a bit of a source of worry for some parents – that their darling offspring might blow 18 years of savings earmarked for university or a car, but the money will be in their name and they technically can spend it how they want.
Should I open a Junior ISA for my child?
If you’ve got kids and are looking to help them save for their future, Junior ISAs are a really good option.
The cash version is a lot like a savings account and is useful if you’ve an older child who might need the money in a few years, say for university or a car.
And for younger kids, where you’ve got at least five years before they can access their money, the Stocks and Shares Junior ISA is worth considering. That’s because over time, investing tends to beat savings rates and is better at keeping up, or outperforming, inflation.
The longer you can afford to invest, the better, as you have longer to ride out the bumps in the stock market. If you’re new to investing or just want to brush up, we’ve got some brilliant guides in our investing hub.
You can only have one type of Junior ISA at a time, although you can usually transfer it to a new provider if you find a better rate or lower fees. You get a £9,000 allowance each year and anything you earn is tax free.
Now, while you won’t have to pay tax on most children’s savings accounts, there are rules that means if your child gets more than £100 in interest from money given by a parent, you do have to pay tax if it’s above your Personal Savings Allowance.