Top tips for investing in Junior Isas

Parents have been advised from widespread sources that Junior Isas are an ideal, and tax efficient, way to set money aside for their children in accounts with the best savings rates.

Recently, Brian Morris, head of savings at the Building Societies Association, said that Junior Isas are incredibly attractive to parents as they offer great flexibility.

Now, Tom Biggar, head of investment at TQ Invest, has offered some essential tips to help parents make the most of investing in a Junior Isa.

To begin with, he recommended setting a goal for the account, for instance is the money to be used to pay for future university fees or a deposit on a first home?

With this in mind, create a savings target and then set realistic monthly amounts to invest in the Isa to reach that goal, although it is prudent to explain to offspring the intended purpose of the money as they will have access to the account from the age of 18.

Mr Biggar said that the tax efficient savings, up to an annual maximum of £3,600, could be invested in either a cash Isa or in equities or split between the two, adding "remember that you are investing for the long term ... so this can provide the time frame to ride out the peaks and troughs of the stock market".

But most of all, Mr Biggar said that investing in a Junior Isa provides parents with an ideal opportunity to teach their children the importance of budgeting and saving.

Moneyextra.com recommends you take independent financial advice before acting on any article

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2011-11-01 13:04:33 © Moneyextra.com