Junior Isas are beneficial in the long term

Parents thinking of opening a Junior Isa should look around for the best investment and savings interest rates.

Tom Stevenson, investment director at Fidelity Worldwide Investments, said that with the current low interest rates on offer, people are starting to look around for the best return.

He explained that Junior Isas present an ideal opportunity as they can often be more long term than other types of savings.

"When considering investments for the Junior Isa, parents must consider the time horizon for their investment. The longer the time horizon, the more beneficial it will be to own higher return but riskier assets," he said.

He added that the longer time frames are beneficial to riskier investments as they have the ability to ride the ups and downs of more volatile investments.

Furthermore, a recent study by JP Morgan Asset Management found that 36 per cent of parents would take out a Junior Isa for their child, while 43 per cent of people would contribute to a Junior Isa if one was opened by a relative or close friend.

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2011-10-24 16:37:12 © Moneyextra.com