Jaskarn Pawar, Independent Financial Advisor explains the benefits of opening a Junior ISA.
I often get asked whether it is worth saving for children via a Junior ISA (JISA).
It is an attractive option that can offer good interest rates if doing it via a Cash JISA and good long term growth prospects if doing it via a Stocks and Shares JISA.
However, the main issue parents and grandparents tend to have with the JISA is the fact that money cannot be taken out once it is put in. Once money goes into the JISA it essentially becomes the property of the child. Money cannot be withdraw from the account until the child reaches 16 years of age and at 18 it is theirs to do whatever they like with.
So what are the benefits of putting money away in this manner?
Well, if you put away an affordable amount each month and do that over a number of years it could add up to quite a significant amount, especially to an 18 year old. In the meantime you will not have necessarily missed that money so it’s kind of a win-win situation.
Another benefit is that you can choose whether to save the money into a bank account where you should receive a reasonable rate of interest, and enjoy low risk. Or, you could invest into a fund that puts the money into stocks and shares, which is higher risk but should return a higher rate of growth over time.
So if you think you could afford to put away an amount of money that wouldn’t be missed the Junior ISA may well be an attractive option for you.
For more information about JISAs, please do contact us on 01604 211234 or email: email@example.com