Junior Stocks and Shares Vs ISA

330d

I am looking at setting up a Junior Stocks and Shares or a Junior ISA for my kids.

So I have had a look at Tesco Bank who offer 2.25% on the ISA account.

I difficult question to answer, but any ideas on what interest I can expect on a Junior and stocks and shares account? Obviously this can be very up and down but any idea what I should be aiming for?

Part of me is thinking of opening both accounts to diversify and lower the risk.

Alexland

S&S investing is suitable for the medium to long term (at least 5-7 years preferably longer) so the age of the kids compared to when they might spend the money would need considering.

The return on a S&S investment will depend on market conditions and asset allocation but for a higher risk 100% equities then I would expect a long term return of at least 2% above inflation and modest charges with ups and downs of up to 50% along the way. If you go medium risk eg 60/40 balanced equities and bonds then maybe it will just about keep up with inflation hopefully a bit higher than the best cash rates.

Kids are allowed one of both Cash and S&S provided they stay within the overall Junior ISA annual contribution limit. If they are old enough to have a Child Trust Fund that would need transfering in.

If going with a S&S Junior ISA then Fidelity have no platform fees if you stick to traditional funds until age 18 you would only pay the fund manager charge with lots to choose from. It might be a nice combination to have 60% in a passive global equities fund such as Fidelity Index World (discounted to 0.10% pa on Fidelity) and 40% in a Cash Junior ISA provided you keep moving it around to get the best rates. At the moment cash, especially at preferential kids rates, is looking good compared to investment bonds.

Our kids JISAs are entirely in that Fidelity fund but that's because they are young, I am increasingly reckless and for various reasons they have done so well in the last couple of years that even if the stock market crashed by 50% tomorrow they would still have most of their original capital. I might have been more conservative if the money was a gift from others.

eskbanker

330d said:

Junior Stocks and Shares Vs ISA

[...]

I am looking at setting up a Junior Stocks and Shares or a Junior ISA for my kids.

[...]

any ideas on what interest I can expect on a Junior and stocks and shares account?

Just to be clear on terminology, Junior ISAs are available in cash or S&S versions, so you're presumably comparing those two, or are you comparing a cash JISA with an unwrapped investment account?