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What Are The Best Junior ISAs?

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Updated: Jun 14, 2022, 3:58pm

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Every parent expects to make mistakes. But opening a Junior ISA (JISA) for your child is very unlikely to be among them. You can pay up to £9,000 a year into one of these tax-free savings accounts (the current tax year 2021/2022 ends on 5 April) and your offspring will have to wait until their 18th birthday to get their hands on the cash.

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Best Junior ISA rates

But what are the best JISAs out there? We’ve carried out some research (June 2022) and found what we believe to be the top five, below. You can find more about how we’ve ranked the accounts in our methodology.

Coventry Building Society Junior Cash ISA

AER (gross) variable

2.60%

Minimum opening balance

£1

Open/ manage account

Post, phone, branch/post, phone, branch

AER (gross) variable

2.60%

Minimum opening balance

£1

Open/ manage account

Post, phone, branch/post, phone, branch

Why We Picked It

Coventry Building Society offers a competitive rate of interest on balances from as little as £1 and accepts transfers from other Junior ISAs (JISAs) or Child Trust Funds.

Once opened, no withdrawals can be made until the account holder turns 18, but the whole balance can be transferred to a different JISA provider.

Interest is calculated daily and paid annually at the end of September. It can be opened via post or over the phone, but there is currently no option for online banking.

Pros & Cons

Leading AER (variable)
Open with £1
Accepts transfers in from other JISAs and CTFs

No online banking option

The Family Building Society Cash Junior ISA

AER (gross) variable

2.40%

Minimum opening balance

£3,000

Open/ manage account

Branch, post/branch, post, phone

AER (gross) variable

2.40%

Minimum opening balance

£3,000

Open/ manage account

Branch, post/branch, post, phone

Why We Picked It

The Family Building Society JISA can be opened with as little as £1, but to access the highest interest rate of 2.40% AER (variable) you’ll need to set aside at least £3,000.

Balances lower than £1,000 pay 1.65% AER (variable), and between £1,000 and £3,000 you’ll receive a rate of 2.15% AER (variable).

This account can be opened in-branch or over the phone, but no online banking options are available. You can open the account by transferring the balance of an existing JISA or savings account. CTF balances cannot be transferred.

Pros & Cons

Competitive AER (variable)
Open with £1
Accepts transfers in from other cash JISAs

Highest interest rates on balances over £3,000 only
High minimum opening balance
No online banking

Tesco Bank Junior Cash ISA

AER (gross) variable

2.25%

Minimum opening balance

£1

Open/ manage account

Online, phone/online, phone

AER (gross) variable

2.25%

Minimum opening balance

£1

Open/ manage account

Online, phone/online, phone

Why We Picked It

This account can be opened with as little as £1, and earns a competitive interest rate of 2.25% AER (variable). Interest is calculated daily and paid annually on the anniversary of the account opening.

Tesco Bank allows you to transfer the balance of an existing JISA or CTF to open the account, which can be created and managed over the phone online.

Pros & Cons

Competitive AER (variable)
Open with £1
Accepts transfers in from other JISAs and CTFs
Open and manage online

Higher interest rates available
No in-branch option

Skipton Building Society Junior Cash ISA

AER (gross) variable

2.10%

Minimum opening balance

£1

Open/ manage account

Branch, post/branch, post

AER (gross) variable

2.10%

Minimum opening balance

£1

Open/ manage account

Branch, post/branch, post

Why We Picked It

Skipton Building Society’s Junior Cash ISA offers savers a competitive rate of 2.10% AER (variable), and can be opened with just £1. Interest is calculated daily and paid annually.

The account allows balance transfers from other JISAs, but bear in mind you won’t be able to transfer funds from a CTF.

To open a JISA, you’ll need to visit one of Skipton’s branches or apply via post. The account can’t be opened or managed over the phone or online.

Pros & Cons

Competitive AER (variable)
Open with £1
Accepts transfers in from other JISAs

Higher interest rates available
CTFs can’t be transferred in
No telephone or online banking option

Halifax Junior Cash ISA

AER (gross variable)

2.00%

Minimum opening balance

£1

Open/ manage account

Branch, online/Branch

AER (gross variable)

2.00%

Minimum opening balance

£1

Open/ manage account

Branch, online/Branch

Why We Picked It

Halifax offers an interest rate of 2.00% AER (variable) on its JISA Cash ISA.

The account can be opened for £1, and if you live with the child you’re opening it for, you can apply online. That said, you will need to visit a Halifax branch to manage the JISA.

Halifax accepts transfers from both existing JISA accounts and CTFs.

Pros & Cons

Competitive AER (variable)
Open with £1
Accepts transfers in from JISAs and CTFs

Higher interest rates available
Manage in-branch only

What’s our methodology?

We used independent data provider, Savings Champion, to identify the top five Junior ISAs in terms of rate. To arrive at our Forbes Advisor star rankings, we also considered other factors including:

whether transfers in are permitted from JISAs and Child Trust Funds (CTFs) from other providers
minimum opening balance
options for opening/ managing the account.

The following applies to all of the accounts:

no withdrawals before a child’s 18th birthday
rates are variable which means they can go up or down
interest is calculated daily and paid annually into the account (on a day specified by the provider) with final interest paid on the account on maturity
no JISA is flexible (more details in our FAQs).

What is a Junior ISA?

Junior ISAs were introduced in 2011 as a replacement to Child Trust Funds (CTFs). Children are eligible for a Junior ISA if they are under the age of 18 and a UK resident. The account must be opened by a parent or guardian, but anyone can pay into it, including friends, grandparents and other family members.

Just as with standard adult cash ISAs, there is a limit to the amount you can save in a Junior ISA each tax year. For the current 2021/22 tax year, the Junior ISA annual allowance is £9,000.

If you don’t use the full annual allowance, you’ll lose it – it cannot be carried over into the next tax year which starts on 6 April.

How does a Junior ISA work?

Once opened, you can either pay the full allowance into a Junior cash ISA or a portion of it can be invested into a stocks and shares Junior ISA too.

A child can only hold one of each type of Junior ISA, but it’s possible to transfer a Junior ISA from one provider to another, or between the different types of Junior ISA.

What interest rates can I get with a JISA?

Interest rates on Junior cash ISAs are expressed as an Annual Equivalent Rate (AER) and rates are usually variable so can go up or down at any point. No tax is payable on the interest earned.

Junior ISAs must be managed by a parent or legal guardian until the child turns 16, at which point the child can take control of their account.

However, the money must be left untouched until the child reaches the age of 18, when the Junior ISA will automatically become a standard cash ISA. The child can then choose to withdraw the funds or keep saving.

Children aged 16 and 17 can open their own Junior ISA as well as an adult cash ISA, allowing them to contribute even more to a tax-free account until they turn 18.

Frequently Asked Questions (FAQs)

Who is eligible for a Junior ISA?

Children under the age of 18 are eligible for a Junior ISA, so long as they do not already have a Child Trust Fund. They cannot have both.

Children born between 1 September 2002 and 2 January 2011 will have had a CTF automatically opened for them by the government. But CTFs can be converted to a Junior ISA if preferred. Rates tend to be better on JISAs versus CTFs.

How do I open a Junior ISA?

To open a Junior ISA for your child you must be their parent or legal guardian. Run an online comparison to find the best Junior ISA for your child, and then fill in the chosen provider’s application form online. Depending on the provider you may also be able to apply over the phone or by post.

What is the minimum amount I can pay into a Junior ISA?

This will vary depending on the provider, but you can often open a Junior ISA with as little as £1.

Can I get a flexible Junior ISA?

A flexible ISA means you are able to withdraw and replace money from your cash ISA without it affecting your annual allowance (so long as you top up your cash ISA in the same tax year the withdrawal was made).

Because the funds in a Junior ISA are locked in (unless in extenuating circumstances), these accounts cannot be operated on a flexible basis.

What happens if I exceed the Junior ISA allowance?

If you pay more than the £9,000 annual allowance into a Junior ISA, the excess will be held in a savings account in trust for the child. It won’t be returned to the donor.

Is my cash safe in a Junior ISA?

Cash saved into an authorised UK bank or building society is protected by the Financial Services Compensation Scheme (FSCS). This means that up to £85,000 per person, per institution, is protected in the event the provider ceases trading.

Providers that are part of a larger banking group can share a FSCS licence with the other brands within the group, which means you only get one dose of protection.

For example, if you held £70,000 in Halifax and £25,000 in Bank of Scotland (both part of HBOS), only the first £85,000 of your cash would be FSCS-protected. This applies to Junior ISA, the same as any other savings account.

How many Junior ISA accounts can I open?

You can only have one Junior cash ISA and one Junior stocks and shares ISA. If you wish to transfer a Junior cash ISA to one with another provider, you must transfer the whole account.

If you want to transfer a cash Junior ISA to a stocks and shares Junior ISA, you can transfer the account in full or in part, so long as the child does not end up with more than one of each Junior ISA type.

When will my child get access to the money?

Your child can start managing their Junior ISA from the age of 16. But they will not be able to access their funds until they turn 18.

Can I transfer a Child Trust Fund to a Junior ISA?

Yes, in April 2015, the government introduced the option to convert a Child Trust Fund into a Junior ISA. Most Junior ISA providers will accept CTF transfers, but it’s definitely worth checking.

You will need to contact the provider and ask to switch your CTF to a Junior ISA. This will usually involve filling in a transfer form with details of the CTF. Your provider will then carry out the transfer for you.

Do Junior ISAs get government contributions?

No, unlike CTFs where HMRC sent a voucher of £250 (or £500 for those on low incomes) to the parents or guardians opening the account, the government does not contribute to Junior ISAs.

Is a Junior ISA worth it?

Opening a Junior ISA is worth considering if you want to lock your child’s savings away until they are 18 or if you’re concerned about tax.

Children are taxed in the same way as adults which means they can earn a total of £18,570 before paying tax (provided they have no earned income) in the 2021/22 tax year. This is made up of the £12,570 personal allowance, the £5,000 starting savings allowance and the £1,000 personal savings allowance. This means that in most cases, children won’t need to worry about paying tax.

However, if money gifted by a parent earns more than £100 in interest per year in a non-ISA savings account, the full amount of interest (not just the £100) will be taxed as if it were the adult’s and not the child’s.
In this case, a Junior ISA could be beneficial as the interest earned would remain tax-free.

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