Opening a Junior ISA

Although as grandparents you can’t open a Junior ISA for your grandchildren, your grandchild’s parents can. Once the Junior ISA is open, you can make contributions up to an annual limit. Just like ISAs for adults, you can both save and invest with a Junior ISA. The current maximum annual limit you can save into a Junior ISA is £4,368. When your grandchild is 18, they will gain full control of the money and could choose to invest it into an adult ISA or a different type of savings account, or they can choose to withdraw it.

Opening a savings account

Choosing the best savings account for your grandchildren will depend on your savings goals. If you’re planning to save for a special birthday or a Christmas present, notice accounts might be a suitable choice. Notice accounts offer competitive variable rates and give you the freedom to withdraw your money after a set notice period, usually 30 or 90 days. The interest you earn is typically paid when you make a withdrawal.

Another type of savings account to consider is a fixed rate bond. Fixed rate bond savings accounts might be right for you if you have a lump sum to deposit that you won’t need to access for a number of years. This type of account could be ideal if you’re saving for your grandchild’s education or perhaps a deposit on a house. With fixed rate bonds, your money is locked away, typically for up to five years, and the interest rate won’t change from the day you open the account until the end of your agreed fixed term, so you’ll know exactly what your return will be.

With a notice account or a fixed rate bond, the money you deposit is held in your name, so if you want the money you’re saving to be accessible to your grandchildren, you’ll need to transfer it to them by making a withdrawal.

What documentation is required to open savings accounts for my grandchildren?

If you’re planning on opening a grandchild savings account, you can typically open one in the child’s name if you have the necessary documentation (except for Junior ISAs). In most cases, you may only need the child’s birth certificate to open a savings account for your grandchild. This will depend on the financial provider, so it’s always best to check the details.