To open a Junior ISA account use our JISA comparison to choose the best children’s ISA account for your needs. You can then apply for your child’s ISA online. These are the steps to open a junior stocks and shares ISA account.
Steps to open a Junior ISA
- Junior Investment ISA can be opened by parents, grandparents or legal guardians on behalf of their child or loved one.
- Once you have chosen a JISA provider you then need to complete the online account opening forms with information such as names and addresses, national insurance numbers and bank account or debit card details.
- Manage the ISA. You will have to decide if you want to pick your own investment or go with a managed provider.
- Parents and guardians can add a lump sum to the Junior Investment ISA of up to the tax-free allowance. Or they can opt to make an initial deposit and then monthly savings thereafter minimum contribution levels may vary between Junior ISA providers.
However, if parents decide to fund the Junior Investment ISA the key point is that no more than the tax-free allowance can be invested within a given tax year.
Industry experts told us"Junior ISAs are a tax-efficient vehicle for parents or guardians to build a pot of cash or assets for children under 18s that is shielded from income and capital gains tax. With a tax-free allowance of up to £9,000, maximising the allowance in full can build a sizeable pot to help a child fund future costs such as a deposit on a first-home or higher education expenses. At 18, the Junior Isa converts into an adult Isa, with the beneficiary taking full control of the account and able to either withdraw the assets or allow savings and investments held within it to remain invested, with any income or gains continuing to grow tax-free."
Opening a cash or investment junior ISA?
The difference between a cash ISA and an investment ISA is that you can potentially make money money with a junior stocks and shares ISA, but it is riskier. With a cash JISA, your returns may be less, but you won’t lose money.
- Junior Cash ISA: This is essentially a tax-free savings account for children. It operates similarly to a regular Cash ISA, where you deposit money into the account, and it earns interest over time. The capital in a Junior Cash ISA is typically low risk, as it’s held in cash deposits or equivalent, such as savings accounts or cash-based investments.
- Junior Stocks and Shares ISA: This account allows you to invest on behalf of a child, and it’s typically invested in stocks, bonds, and other financial instruments. It offers the potential for higher returns compared to a Junior Cash ISA, but it also comes with higher risk since the investments can go up or down in value.