Launched in 2011, a junior ISA is the same as the adult ISA in its tax-free saving potential but only available for children. It allows parents, grandparents and family friends to invest in cash and shares on behalf of children under the age of 18.
The Coventry Building Society Junior Cash ISA is paying 3.25%, which puts it at the top of the best-buy table. It has a minimum initial deposit of £1 and for the tax year 2013/14 the maximum you can pay into a junior ISA is £3,720.
Interest is paid yearly on 30 September and when the child reaches the age of 18. All the money saved in the ISA belongs to the child and it cannot be accessed until the child’s 18th birthday.
The account can be opened online, by post, on the phone or in branch, and can be operated in the same ways – except online.Withdrawals cannot be made but further deposits are allowed, as are transfers in from other junior ISAs.
The 3.25% rate is matched by the Nationwide Building Society Smart Junior ISA, but the account includes a 1.15% bonus that expires on 31 January 2015. So the Coventry BS account comes out on top.
For further details about its JISA, visit the website at coventrybuildingsociety.co.uk or call 0845 766 5522.