Junior ISA: a Savings Account for Underage Children
Individual Savings Accounts, which can also be called ISAs, are really well-liked savings account which today represent a whole new way to save or invest money, according to one’s needs and preferences. As a matter of fact, all UK residents are eligible to open an ISA. UK citizens can choose between a great variety of different accounts, each and every one designed to meet the needs of certain categories of people. For this reason, the UK government has created a special Individual Savings Account specifically designed to save money for underaged people. Like any other ISA, Junior ISA (which can also be called JISA) will give you the chance to save or invest money for your underage children and in a tax-efficient way. As a matter of fact, this means that all the money you’ll save for your children will be protected from UK tax. In the United Kingdom you have a wide choice when it comes to save money for your son or daughter. You also have the chance to invest your money in premium bonds for children.
What is a Junior ISA and how it works
The UK government has given his citizens a new way to save money for their underage children and in a tax efficient way- This particular kind of account is called Junior ISA, a savings account which can be opened by a parent or by a legal guardian for their children under the age of 18. Being this account completely tax free, you’ll be able to put money aside without ever paying any tax on it. You can also decide to invest your capital in order to give it the chance to grow in time while never paying any tax on it. Just remember that, just like any other kind of investments, your money will have a chance to grow but might also go down.
Moreover, just like any other type of ISA, the JISA comes with a restriction on the amount of money you can deposit in a year. The annual ISA allowance for a Junior ISA is currently up to £9.000 and you can deposit a minimum amount of £25 per month. As previously mention, the money can be added by parents or legal guardians. Another thing to know about the JISAs is that other family members and friends can contribute to your children’s future too by depositing how much they want. When he turns 18, your children will have free access to their savings and will be able to use the money however they want.
How many types of JISAS are there?
Junior ISA come in two different types, which have been specifically designed to meet the needs of as many people as possible. The first one is the Cash Junior ISA, which is like a regular savings account designed for underage children. It can be opened by a parent or by a legal guardian to save money for their children’s future in a tax efficient way. There’s also the Stocks and Shares Junior ISA, which nowadays is growing in popularity. Like previously mentioned, this kind of account will let you invest your money instead of just saving it. This way, you’ll give your savings the chance to grow. When opening a Stocks and Shares Junior ISA, you should never forget about the risks that come with any kind of investment. However, whichever type of JISA you decide to open, your children will be able to control the account at 16 and to withdraw their money as soon as they turn 18.