12:21 28 February 2013
Everyone wants what is best for their children and a head-start in their adult life. Sometimes it is difficult to know what options are available and which you should choose. Junior ISAs (Individual Savings Accounts) are an excellent beginning to providing for your children, or grandchildren.
There are two basic types of Junior ISAs that can be used to give a child a head start in their adult life:
1.Basic cash Junior ISA allows you to save money for a child, and any interest accrued is tax-free. You can start small, but in order to get the best benefit of this account, saving large amounts which will earn more interest is the ideal plan.
2.Stocks and shares Junior ISAs allow you to actually invest your saved cash into something with a potential higher rate of return, and the great news is that the capital growth is still tax-free. If you have the money and time to take some long-term risks this option offers the potential for larger growth and therefore a greater return on your initial investment money.
If you are not sure which option is best for you, or you don’t want to choose between the two options, consider dividing your initial money and creating one of each of these Junior ISAs. Yes, that is completely legal.
If you like the idea of a more stable return on your investment, such as the guarantee that you will never have less than you initially invest option 1 is a great plan. It doesn’t hurt to have one account with a secure form of earning and another to try and establish a greater return on an investment to help a child’s future.
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