You are here: Home - Saving & Banking - News -

NS&I to close children’s bonds as it launches junior ISA

0
Written by: Paloma Kubiak
15/08/2017
NS&I is to close its children’s bonds to new applicants from next month as it announces a new junior ISA offering.

The government’s savings arm will close children’s bonds to new sales from September. There are currently more than 839,000 children’s bonds but NS&I confirms customers will be able to keep the product until their current term matures.

NS&I’s children’s bonds were first issued in 1981 where it paid a bonus at the end of the fixed term in addition to the interest rate. In 2012, the bonus element was removed in favour of a simpler interest rate structure.

Currently, the five-year bond pays 2.00% tax-free AER on a minimum £25 investment.

NS&I has also today announced it is launching a Junior ISA.

It will pay 2.00% tax-free/AER interest and it can only be opened and managed online. The minimum deposit is £1 and maximum subscription limit is £4,128 for the 2017/18 tax year.

Anyone can pay into the account, but only those with legal responsibility for the child can open the savings product.

Once the child reaches 16, they can take control of the ISA, though no withdrawals are allowed before the age of 18.

NS&I confirms it will allow transfers of Child Trust Funds and other junior ISAs.

How good is the NS&I Junior ISA?

One of the major benefit of any NS&I product is that it’s backed by HM Treasury so they offer 100% capital security.

However, the 2.00% interest rate is at the lower end of junior ISA offerings currently available in the market.

According to Moneyfacts data, the top paying junior ISA comes from Coventry Building Society, offering 3.25% AER on a minimum £1 deposit. However, unlike NS&I, the product can only be opened in branch or by post, not online.

Alternatively, if you’re looking for a better rate but with internet access, Nationwide Building Society’s junior ISA offers 3% AER and the account can be operated via app too.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
House prices and rents continue steady growth

Average house prices in the UK have increased by 4.9% in the year to June 2017, according to the Land...

Close