Junior Individual Savings Accounts (JISAs) enable investments or savings to be built up on behalf of a child. People can invest up to £9,000 a year into a JISA and no tax is payable on interest or investment gains. However, while the Bank of England continues to hike its Base Rate to help temper soaring inflation, savers are being offered some of the highest returns seen in decades – making now a good time to keep an eye on the market.
Only a parent can open and manage a Junior ISA account on their child’s behalf, but anyone – including grandparents – can contribute.
Alice Guy, personal finance editor at interactive investor, said: “Starting a JISA while your children are young is a great way to introduce your children to the world of investing and building wealth.
“It could also provide a valuable opportunity to talk about money, for example, getting the annual statement is a good time to talk to them about shares, dividends and, hopefully, how their savings are starting to grow.”
Some accounts are offering higher interest rates than others. Money comparison site Moneyfacts has pulled together the top six available right now.
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Placing second on the list is Coventry BS’ Junior Cash ISA (2) with an AER of 3.6 percent.
This account requires a minimum deposit of £1 and interest is calculated daily and paid annually on September 30. It must also be noted that the AER for this account will increase to 3.8 percent from January 6, 2023.
This is also a no-access account – the child can only access the money when they reach 18. However, money can be moved to another junior ISA provider anytime with an ISA transfer and in this instance, all of the money must be moved.
Loughborough BS’ Junior ISA ranks third with an AER of 3.5 percent.
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Beverley BS’ Junior Cash ISA places fifth with an AER of 3.45 percent.
A minimum deposit of £1 is required to open and interest is calculated daily and added annually on April 5. Withdrawals are also not permitted until the child turns 18.
Finally, sixth on the list Newbury BS’ Junior Cash ISA with an AER of 3.25 percent.
This account requires a minimum deposit of £50 to open and interest is calculated daily and paid annually on October 31 or upon closure.
Withdrawals are also not permitted until the term ends with the child turns 18. After this point, the account will be transferred to an easy access adult Cash ISA and the holder will be able to make withdrawals.