What is it?
It is a tax free savings account which is only available for young people.
There are two types:
Cash Junior ISA: deposit based account available in banks and building societies.
Stocks and shares Junior ISA: invest your child's savings in a stock market investment.
Each eligible child can only have one cash and one stocks and shares Junior ISA.
Who is eligible?
Any child up to the age of 18 living in the UK can have a Junior ISA.
If your child already has a Child Trust Fund they cannot open a Junior ISA as well, but they can transfer it into a Junior ISA.
How much can you save?
Up to the maximum Junior ISA allowance, which is £4,128 in the 2017/18 tax year.
The allowance resets every tax year and you can add a new allowance to your Junior ISA each tax year until your child turns 18.
If you open a cash Junior ISA and a stocks and shares Junior ISA you have to make sure you do not collectively exceed the Junior ISA allowance each tax year, as the allowance is shared over both types.
For example; if you pay £3,000 into your Junior ISA, you can only pay in a further £1,080 into a stocks and shares Junior ISA.
Anyone can pay into a child's Junior ISA account, as long as they have the correct account details*.
No, unlike Child Trust Funds, the government will not give you any money to help you save into a Junior ISA.
Who can open a Junior ISA?
Your child can use both their Junior ISA allowance (in a Junior ISA only) and their adult ISA allowance (in an ISA only) between the age of 16 and 18.
This depends on the age of your child:
If they are under 16 years old: a parent or guardian needs to open the Junior ISA on their behalf.
If they are 16 or 17 years old: they can open a cash Junior ISA themselves, but not a stocks and shares Junior ISA.
If you open a cash Junior ISA on behalf of your child it will automatically switch into their name when they turn 16, but they will not be able to access the money until they turn 18.
Until they reach 16 years old, you will be responsible for the money in their Junior ISA.
You can only have one cash Junior ISA and one stocks and shares Junior ISA.
Can you withdraw from them?
No, you will not be able to access the money you put into a Junior ISA until your child turns 18 years old.
At this point, the Junior ISA will turn into an instant access ISA in your child's name.
Where can you open a Junior ISA?
Most banks and building societies on the high street offer a cash Junior ISA. You can also apply online for both cash and stocks and shares Junior ISAs.
Stocks and shares Junior ISAs will invest your money in the stock market, which makes it a risk to your child's savings. Make sure you get financial advice before applying.
Each Junior ISA works in the same way but most offer different interest rates.
To find the best possible Junior ISA you have to compare the interest rates from every provider.
Can you transfer Junior ISAs?
Yes, but not all providers accept Junior ISA transfers so make sure you ask before applying.
It is also possible to transfer a cash Junior ISA into a stocks and shares Juniors ISA, and vice versa, but it is not possible to transfer a Junior ISA to an adult ISA.
If you find a better interest rate with another savings provider then you can ask them to transfer your Junior ISA for you.