If you’re a parent, guardian or grandparent looking to set up a savings pot for a loved one that can be unlocked when they hit 18, then you have a couple of options available.
Is it possible to open an account that my child can’t touch until they turn 18?
Yes. One way to help your child build up a nest egg is to open a Junior ISA. There are a few different types of ISAs, but to keep things simple, we can split them into 2 broad categories: cash ISAs and stocks and shares ISAs. Within these 2 categories, there are cash Junior ISAs and stocks and shares Junior ISA. With a Junior ISA, a child can take control of the account when they’re 16, but cannot withdraw the money until they turn 18.
It’s possible to put money in either a cash Junior ISA, a stocks and shares Junior ISA or both. In this guide, we’re looking at cash Junior ISAs. We have a separate guide on junior stocks and shares ISAs where returns are determined by the performance of the stock market. The key difference between a cash ISA and a standard cash savings account is that no tax is payable on any interest earned on money deposited into an ISA.
Unlike a regular children’s cash savings account, the amount you can put into an ISA each tax year is limited. This limit is known as the annual allowance. Adult and Junior cash ISAs have different limits.
How to compare Junior ISAs
When comparing Junior ISAs, you’ll want to find one that pays a competitive interest rate. However, it’s also important to keep the following points in mind:
What is the minimum deposit requirement? Some Junior ISAs can be opened with as little as £1, but some might ask for considerably more.
How can the Junior ISA be managed? Some might be operated in-branch only, especially with a smaller provider, while others can be managed by post, over the phone or online.
Are there any penalties for transferring your Junior ISA? Your child can only have one cash Junior ISA, but you can transfer it to another provider to get a better rate. Just make sure you do not need to have held the Junior ISA for a certain time before penalty-free transfers are permitted.
Compare cash Junior ISA accounts
Table: sorted by interest rate, promoted deals first
Junior ISAs were introduced in 2011 as a type of long-term tax-free savings account to encourage parents and carers to save money for their children. These ISAs replaced Child Trust Funds (CTFs), which were closed to new applications that same year.
Parents and guardians can open a Junior ISA for their child as long as the child is a UK resident and under the age of 18. Anyone can then pay into the ISA, including family members and friends.
Like standard adult cash ISAs, you can only pay a set amount into a Junior ISA each tax year. For the 2024/25 tax year, the Junior ISA allowance is £9,000. If you don’t make full use of the annual allowance, you can’t carry it over into the following year.
Only one Junior cash ISA can be held per child, and the money cannot be accessed until the child turns 18 apart from in exceptional circumstances. As soon as you’ve paid money into the Junior ISA, it belongs to the child.
Children can start managing their own accounts from the age of 16, and once they turn 18, their ISA automatically becomes an adult ISA.
If your child was born between 2002 and 2011, they might still have a CTF, which can be transferred into a Junior ISA.
How does my child access this account when they turn 18?
When the child turns 18, their Junior cash ISA becomes an adult cash ISA. Once this happens, they can make withdrawals when they want.
Pros and cons of Junior cash ISAs
Pros
No tax payable on interest earned
Save up to £9,000 each tax year
Anyone can pay into a Junior ISA for a child
Useful way to save money for your child’s future
Cons
Money can’t be accessed until your child turns 18
You can only have one cash ISA per child
Junior cash ISA rates aren’t always competitive
Bottom line
As long as you’re happy to lock away money for your child until they reach the age of 18, a Junior cash ISA can be a great way to invest for your child’s future. However, the interest rates available with some Junior cash ISAs are not very competitive. If you’re investing for the long term, you may be better off looking at a stocks and shares Junior ISA instead.
Finally, remember that any money placed in the Junior cash ISA belongs to your child, so as soon as they are old enough to access it, it’s up to them how they spend it.
Finder survey: How confident do you feel teaching your child/children about ISAs?
Response
Male
Female
Quite confident
43.67%
28.92%
Neither confident nor unconfident
21.4%
26.99%
Quite unconfident
11.79%
20.69%
Very confident
18.34%
11.57%
Very unconfident
4.8%
11.83%
Source: Finder survey by Censuswide of 1007 Brits, July 2023
Frequently asked questions
Yes, as long as the bank or building society you're considering is authorised by the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA), it must protect customer deposits under the Financial Services Compensation Scheme (FSCS).
This means that up to £85,000 per person, per banking institution, will be covered if the bank goes bust.
If you go over the £9,000 annual Junior ISA limit, the additional funds will be held in a savings account in trust for the child. The money won't be returned to the original donor.
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Nick Renaud-Komiya has been a writer and reporter for nine years, covering a range of consumer issues from energy suppliers to banking and mortgage issues. He enjoys helping people take control of their personal finances and better understand their consumer rights. Nick’s consumer writing and money journalism has been featured in a range of outlets including MoneySavingExpert.com, The Sunday Mirror, The Independent and Money.co.uk. Outside of work Nick enjoys cooking and collecting old David Bowie merch. See full bio
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