One personal and business bank account provider recently announced what parents are in store for once the Junior ISA hits the marketplace.
The nation’s largest building society, Nationwide, announced it will be paying an interest rate of 3 per cent on the new savings accounts especially geared towards children. However, concerns have now been raised that other financial services providers will be slow to adopt the new savings products for the time being.
Spain-based bank Santander stated that it was still considering its options, while Barclays remarked that it will be reviewing its decision sometime later this year or early next. Other banking providers have stated outright that they are not planning anything for 2011.
Nationwide will be launching its Junior ISA saver on 1 November. The Government cleared Junior ISAs back in March of this year, yet it has only been recently that UK lenders have begun to speak up over the kinds of rates they will be offering on the new products, with Nationwide the first provider to unveil the rate on its own offering.
As the Government binned Child Trust Funds at the beginning of 2011, Junior ISAs are billed as their replacement, though they do differ in that the state will not be supplying free cash to Junior ISA holders. Instead, the new offering will be nearly identical to their adult versions, with both investment and cash versions available.
There will be differences between the two, as the yearly cap will be significantly less than the adult £10,680 maximum. The Junior ISA cap will be set at £3,600, though not every child will be eligible for the tax-free savers.