Which junior cash ISAs pay the most interest? Best buy junior cash ISAs

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If you have a junior cash ISA, you could earn 3.5% in interest. But you could earn far less. Find out the best buy junior cash ISAs.

Best buy junior cash ISAs

There is a handful of junior cash ISA providers which currently over 3% interest. There are other providers of junior cash ISAs that pay less and some providers that paid a great rate when junior ISAs were launched in 2011 but now pay rather less.

Here are the best buys:

Coventry Building Society Junior Cash ISA: currently pays 3.5% on balances of £1 or more.

How is it operated? In a branch, over the phone or by post.

Can you make transfers in? Yes, from other junior ISAs (cash or stocks and shares) or child trust funds.

Worth knowing: Coventry Building Society paid 3.25% since it launched its junior ISA and recently increased that to 3.5%.

SAVVY TIP: Interest is paid annually on 30th September, with the final interest payment being on your child’s 18th birthday.

Nationwide cash Smart Junior ISA: currently pays 3.25% on balances of £1 or more.

How is it operated? Online or in a branch.

Can you make transfers in? Yes, from other junior ISAs or child trust funds. You can apply for a transfer in pack online.

SAVVY TIP: Interest is paid annually on 31st October.

Danske Bank Junior Cash ISA pays 3.25% on balances of £25 or more.

How is it operated? The website doesn’t say – although it does say that the account has to be opened in a branch. This bank operates in Northern Ireland.

Can you make transfers in? Yes, from other junior ISAs or child trust funds.

Tesco Bank Junior Cash ISA currently pays 3.15% on balances of £1 or more.

How is it operated? You can operate the account online or over the phone.

Can you make transfers in? Yes, from another provider’s junior cash or stocks and shares ISA, but not from a child trust fund.

SAVVY TIP: Interest is paid annually on the anniversary of opening the account.

Halifax Junior Cash ISA: pays 3% interest on balances of £1 or more.

How is it operated? You can open the account online or in a branch but you can only check your balance in a branch.

Can you make transfers in? Yes, from junior ISAs and child trust funds. If you want to transfer money from an existing child trust fund, you can only do this in a branch.

SAVVY TIP: Interest is paid on April 5th every year or the nearest working day to it.

TSB Junior Cash ISA: pays 3% interest on balances of £1 or more.

How is it operated? The account can be opened and operated in a TSB branch.

Can you make transfers in? Yes, from another provider’s junior cash or stocks and shares ISA, but not from a child trust fund.

SAVVY TIP: Interest is paid once a year on 31st March.

Darlington Building Society Junior Cash ISA: pays 3% interest on balances of £1 or more.

How is it operated? You can operate the account in a branch or by post.

Worth knowing: Interest is paid annually on December 31st.

Can you make transfers in? Yes, from another provider’s junior cash ISA, but not from junior stocks and shares ISAs or a child trust fund.

Santander Junior Cash ISA: pays 3% interest on balances of £1 or more, but only if you have a 123 or select bank account. If you don’t have one of these accounts, you’ll get 2.5% interest.

How is it operated? You can open the account in a branch and manage it online, in a branch, or by phone.

Worth knowing: Interest is paid annually on December 31st.

Can you make transfers in? Yes, from another provider’s junior cash or stocks and shares ISA or from a child trust fund.

NS&I Junior Cash ISA pays 2.5% interest on balances of £1 or more.

How is it operated? You can open and manage the account online.

Worth knowing: Interest is paid annually on April 6th.

Can you make transfers in? Yes, from another provider’s junior cash or stocks and shares ISA or from a child trust fund.

Which junior ISA providers have reduced their interest rates?

When junior ISAs were launched in November 2011, there were a number of banks and building societies that paid high interest rates. Several of them have reduced their interest rates since then. So if your child has an account with them, it may be worth transferring elsewhere.

Here are a few of them:

Furness Building Society Junior Cash ISA. This junior cash ISA used to pay 3.05% but now pays 1.85%.

Market Harborough Building Society Junior Cash ISA: This junior cash ISA used to pay 3.05% on balances of £3,000 or more, and 2.5% on lower balances. It now pays 2.5% on balances of £3,000 or more and 2% on lower balances.

Skipton Building Society Junior Cash ISA: This junior cash ISA used to pay 3.02% on balances of £1 or more but now pays 2.25%.

The Family Building Society Cash Junior ISA: This junior cash ISA pays 2.5% interest on balances of £3,000 or more. When junior ISAs were launched, it was branded as National Counties building society and it paid 3.01% on balance of £3,000 or more. It now pays 2.25% on balances from £1,000 to £3,000 and 1.75% on balances from £1 to £1,000.

Junior cash ISA basics

Junior cash ISAs are open to any child under the age of 18 who doesn’t have a child trust fund (the tax-free savings accounts that were replaced by junior ISAs). Some banks and building societies will only let children under the age of 17 open junior ISAs. Your child has to live in the UK. Most providers will let you open one for your child up to the age of 16, and after 16 they’ll be able to open it themselves. There’s more about Junior ISAs – how to save and invest for children which explains all about how they work, in my article.

Related articles:

Children’s savings accounts paying the highest rate of interest

The tax-free savings allowance – interest of up to £1,000 a year tax free

Money saving tips you’d pass onto your children

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