11th August 2022

Is there an ISA for babies?

Saving for your child’s future can seem like a daunting task, but it is important to start as early as possible. Many parents wonder if there is a ‘Baby ISA?’ – the answer is no, there is no specific product for babies, but there is a product called a Junior ISA which can be opened when a child is born. A Junior ISA will reap many benefits for the child named on the account most importantly, your child will have a nest egg that they can access when they reach adulthood.

In order to open a Junior ISA, from the Children’s ISA, for a baby, all you need is their National Insurance number and the details of the bank account that will be affiliated with the Junior Investment ISA account. Many new parents (and often grandparents) will want to start a long-term savings vehicle for their child or grandchild and a Junior ISA is an ideal option.

The money that you save into a Junior ISA will grow tax-free and can be used for any purpose when your child reaches 18 years old. The key benefits of starting to save into a Junior Investment ISA as soon as possible are twofold:

Compound interest – the sooner you start saving, the longer your money has to grow. This is due to compounding interest, which essentially means that interest is earned on both the initial deposit and any subsequent interest that has been generated. Investments vs. cash – over the long term, investments have historically outperformed cash, especially when interest rates are low and inflation is high.

What can the money be used for? – the money saved into a Junior ISA can be used for any purpose when your child reaches 18 years old. When the child named on the account reaches adulthood the Junior ISA will be transferred into a standard Investment ISA and, if they wish, the child can access the funds in the account. This could include a house deposit, or even pay for their education.

Here at the Children’s ISA, we have put together what happens on the journey of a Junior ISA. Here you will also find a handy calculator so you can understand, based on historical performance, an indicative sum that your child could access, based on regular monthly contributions. 

We like to say that opening a Junior ISA is as easy as A, B, and C. Once you have opened the account friends and relatives can pay into the account with ease, as a parent you can then make regular contributions and also one-off payments whenever circumstances allow.

So, in summary, there is no ‘Baby ISA’ as such but there is a Junior ISA which can be opened for a baby that will offer many benefits, most importantly a nest egg for the child’s future. And, the earlier you can start saving for your child’s future the better. If you would like to find out more about Junior ISAs, the different funds available and how they can work for your family please do not hesitate to get in touch with our expert team here at the Children’s ISA. We would be more than happy to help you plan for your child’s future.

© The Children’s ISA Ltd 2024. All rights reserved.

The website and the information contained therein should not be regarded as an offer or solicitation to conduct investment business in any jurisdiction other than the UK. Past performance is not necessarily a guide to future performance and the value of your investment may fall as well as rise, and any income received in the form of dividends may fluctuate. You may not get back the full amount when the account is closed. If paying regular monthly contributions please bear in mind that if contributions are not maintained you will be less likely to achieve the investment amount that was originally projected.

The information on this website is not advice, it is provided solely to enable you to make your own investment decisions. The investments and /or investment services referred to may not be suitable for all investors.

The Children’s ISA Limited is authorised and regulated by the Financial Conduct Authority. (FCA No: 563043)
The Children’s ISA Limited is a company registered in England and Wales. Registered Company Number: 07486015

Registered Office: Unit 2, Digital Park, Pacific Way, Salford Quays, M50 1DR