Both Child Trust Funds and Junior ISAs are tax efficient, have an annual contribution limit of £4,128 and, once set-up, allow other people to pay into the account. While these are similar products, some of the differences are detailed below.
Stakeholder Child Trust Fund
- Most people have a 'stakeholder' Child Trust Fund which is invested in the stock market. Here are some features of a stakeholder Child Trust Fund which you might want to consider before transferring your account.
- Stakeholder child trust funds, like the one from OneFamily, have to accept top ups into the account from as little as £10.
- The charge for running a stakeholder Child Trust Fund is capped at 1.5% and cannot be increased at any time throughout the life of the account.
Stocks & Shares Junior ISA
- The most comparable product to a stakeholder Child Trust Fund is a Junior ISA invested in the stock market. But there are some important differences:
- Junior ISA providers set their own limits on minimum premiums into the account, so can set higher minimum payments. They can also set their own limits on accepting transfer balances.
- Though there are plenty of good value Junior ISAs, such as the one provided by OneFamily, providers do not have to cap their charges and are free to change them at any time.
No matter which type of account you choose, both can be used to invest for a child's future and help give them the best start in adult life. Please note, this is general information about these products, and individual product features may vary by provider and individual account. The tax treatment of Child Trust Funds and Junior ISAs depends on individual circumstances and may change in the future. Cash Child Trust Funds and Junior ISAs are also available, however providers are not obliged to provide them.