NS&I Children's Bonds overtaken by Junior ISAs
NS&I stopped selling Children’s Bonds on 24th September this year. It had announced its intention to do so on the launch of its Junior ISA cash savings product in August. Those who already hold the accounts can keep them until maturity. At that point, they will need to cash them in and find a new home for their money.
The Children’s Bonds are held by over 800,000 people, and offer 2% interest a year over five years.
Sarah Coles, Personal Finance Analyst, Hargreaves Lansdown:
"Children’s Bonds have provided hundreds of thousands of children with a nest egg for the future. However, there comes a time when reliable old stalwarts are overtaken by newer and better models. In this case it’s the Junior ISA which has knocked the Children’s Bond off the podium."
The more modern savings vehicle simply has a better spec. A Children’s Bond was taken out by parents, grandparents or great-grandparents, and held by them alone until they cashed it in or it matured. The JISA is opened by a parent or guardian, but then anyone can contribute. It gives a far broader group of people the opportunity to help save for a child’s future."
"The JISA also allows more to be invested: with a Children’s Bond there was a limit of £3,000 per issue, whereas the JISA allows investments of up to £4,128 this tax year."
"There’s more choice with a JISA too. If you want to hold cash within a JISA, you can look beyond NS&I, and there are more competitive deals around than the 2% on offer from NS&I at the moment. However, the JISA doesn’t restrict you to holding cash. It allows you to hold stocks and shares too, which is likely to accelerate the growth of your savings far quicker than cash if you are saving for 5-10 years or more."