There are two types of Junior ISAs (JISAs): cash JISAs and stocks and shares JISAs.
The difference is how the money grows (or aims to grow) while the child themselves grows.
Stocks and shares junior ISAs
Stocks and shares JISAs are long-term investment accounts for children. The money is invested in an investment fund on the child's behalf, with the aim of growing it by more than inflation.
This gives your money good potential to grow, but the value is likely to go up and down over time. So, there's a risk that your child could end up with less money than has been paid in if they withdraw at a time when the value is lower.
Cash junior ISAs
Cash JISAs are savings accounts for children. The money earns interest, like other savings accounts do.
So, there's no risk of the value going down but it has less potential to grow compared to money in a stocks and shares JISA. It could lose value if inflation goes up more than the interest rate the account earns.
Key differences at a glance
| Cash junior ISAs | Stocks and shares junior ISAs | |
|---|---|---|
| How do I open it? | Open it directly with a cash JISA provider. | Open it directly with a stocks and shares JISA provider. |
| How does it grow? | Grows by accumulating interest. Interest rates vary between providers. | Grows by investing in the stock market. There are a variety of fund options to choose from. |
| What are the risks? | Money may lose value over time, since inflation can be higher than interest rates. | Investments may lose value due to changes in the stock market. |
Are stocks and shares junior ISAs risky?
Money in a stocks and shares JISA is invested, so there is the possibility that your child could get back less than has been paid in. This is what we mean when we talk about "investment risk".
But they also have good long-term growth potential when compared to cash JISAs, where your money is protected but could lose value over time due to inflation. In fact, in every 5-year period between 2000 and 2021, stocks and shares have out-grown interest rates.*
*Source: Barclays GILT study 2023
Can a child have a stocks and shares junior ISA and a cash junior ISA?
Yes! Your child can have one of each in their name. But the JISA annual allowance limit - currently £9,000 each tax year - is per child, whether they have one or two JISAs.
Can a child have a child trust fund and a junior ISA?
No. But you can transfer an existing child trust fund into a junior ISA.
How do I find out how my stocks and shares junior ISA is performing?
If it's a OneFamily JISA, log into your online account, where you’ll see the current balance.
Other providers might be different, so it's best to check their website for details.
Can I cash in a junior ISA and reinvest elsewhere?
No - you can't withdraw any money until the JISA matures (when the child turns 18). Any money paid into a JISA is locked in for the child until they turn 18, unless your child passes away or is diagnosed with a terminal illness.
But you can transfer an existing JISA to another provider without taking any money out.
What would you like to do next?
Find out more about junior ISAs
Our guides contain everything you need to know to about investing for your child's future in a junior ISA.
Transfer to OneFamily
Transferring a child trust fund or junior ISA from another provider to OneFamily is simple and we don't charge you to do so.
Open a OneFamily Junior ISA
Give your child more options when they reach 18 with our straightforward Junior ISA. Simply choose one of our three climate-focused funds to start investing on their behalf.
Our Junior ISA invests in stocks and shares. The value is therefore likely to go up and down over time.
This is normal for this type on investment, but it means there is a risk your child could get back less than has been paid in if they withdraw at a time when the value is lower.
