In the following guide we look at the interest rates on Junior ISAs (JISAs) which can be opened online. We also explain the benefits and drawbacks of such accounts.
Best Online Junior Cash ISA Rates
| Online JISA provider | AER Interest rate | FSCS protection |
| NS&I | 4% | 100% government-backed |
| Tesco Bank | 4% | £85,000 |
| Lloyds | 3.35% | £85,000 |
| Halifax | 2.85% | £85,000 |
Rates shown above are variable. Data as at 14/01/2025
What is a Junior ISA (JISA)?
Junior Individual Savings Accounts (JISAs) are long-term, tax-free savings accounts for individuals under the age of 18.
As of the 2024–2025 tax year, the annual savings limit across all of a child’s JISAs is £9,000. It is possible to open multiple JISAs, but the limit still applies.
The chief benefit of JISAs is that no tax is payable on earnings from savings held in them up to the limit. This includes interest on cash, or capital growth and dividends from investments.
Parents can open a JISA for a child of any age, but a child can only open a JISA for themselves between the ages of 16 and 18.
Children can also make decisions about their existing JISAs after the age of 16, but they cannot withdraw the money until they are 18.
Pros and cons of JISAs
JISAs effectively lock away savings for a child until they reach the age of 18. Depending on your perspective (i.e., whether you are a concerned parent or a spendthrift whippersnapper), this could be a good or bad thing.
As children have access to the same tax benefits on earnings from savings as adults – including the £12,570 personal allowance, £5,000 starting savings allowance, and the £1,000 personal savings allowance (PSA) – the financial benefits of JISAs for most children are questionable.
This is because they are eligible to earn up to £18,570 from their own savings, which can be held in different kinds of savings or investment accounts. These may offer better returns on interest or investments and allow withdrawals before the age of 18.
However, if the child earns more than £100 a year in interest from money given by a parent, then holding it in a JISA could be worthwhile from a financial perspective. This is because if this threshold is exceeded, the entire amount may be taxed at the parent’s tax rate (although the parent’s personal savings allowance also applies).
Who can contribute to a Cash JISA?
Anyone, including parents, step-parents, grandparents, friends of the family, and the child themselves, can contribute to a JISA.
What happens to a junior Cash ISA at 18?
Junior ISAs automatically turn into an adult ISA when the child turns 18. The money can then be withdrawn from the account by the child, transferred to another type of savings account, or kept in the adult ISA.
Adult ISAs offer similar benefits to JISAs, with the tax-free earnings allowance instead set at £20,000 a year.
How do Cash JISAs differ from Stocks & Shares JISAs?
A Junior Cash ISA (or Cash JISA) allows a child to earn interest on savings held in the account.
Any cash held in such accounts is usually protected by the Financial Services Compensation Scheme (FSCS) guarantee of up to £85,000 on deposits, should the provider fail. However, the state-owned National Savings and Investments (NS&I) bank, which offers a JISA, guarantees any savings held in its accounts.
By contrast, Stocks & Shares JISAs allow a child to earn returns from investments in the stock market.
While interest on cash typically offers lower returns than the stock market, it comes with a lower risk of losses. Any money invested in the stock market can be permanently lost, should the investment fail, while this is unlikely to happen to cash.
However, if the rate of inflation is higher than the interest rate provided by the account, or if the currency depreciates, then the real value of the savings can fall.
If you are prepared to take some risk for potentially better returns, these providers offer investment junior ISAs.
| JISA Provider | JISA Fees | DIY or Managed | Customer Reviews | GMG Rating | More Info |
|---|---|---|---|---|---|
 | £0 | DIY | See JISA Capital at Risk |
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 | £0 | DIY | See JISA Capital at Risk |
||
 | 0.25% per year | DIY | See JISA Capital at Risk |
||
 | 0.6% | Managed | See JISA Capital at Risk |
||
 | 0.75% | Managed | See JISA Capital at Risk |
||
 | 0.5% per year | Managed | See JISA Capital at Risk |
||
 | 0.45% | Managed | See JISA Capital at Risk |
Robin has more than six years of experience as a financial journalist, most of which were spent at Citywire, and covers the latest developments in the investing, trading and currency transfer space. Outside of work, he enjoys reading literature and philosophy and playing the piano.
You can contact Robin at robin@goodmoneyguide.com
