Cash Junior ISA vs stocks and shares Junior ISA

A child can hold one cash Junior ISA and one stocks and shares Junior ISA at the same time, and they can be with different providers¹. The two accounts sit side by side: the cash account works like a savings account, and the stocks and shares account holds investments. The annual Junior ISA allowance is a single combined figure that can be split between them in any proportion, and the total paid in across both must not exceed the limit³.

The choice between the two is not either/or. A parent or guardian can open one of each type for the same child, and the money can be divided however suits the child's circumstances⁵. What differs is what each account holds, how the money can be moved between them, and what happens when a provider does not accept a transfer.

This page sets out what each type of Junior ISA offers, how the allowance is shared, how transfers between a cash and a stocks and shares Junior ISA work, and where Junior ISA transfers do not apply.

A child can hold one cash Junior ISA and one stocks and shares Junior ISA

The rule is set in the Junior ISA regulations, which say that an eligible child may hold only one account set up as a cash account and only one account set up as a stocks and shares account². The same limit is repeated across provider guidance: a child can have one Cash and one Stocks and shares Junior ISA at any time¹⁴, and a child under 18 can only have one Junior Cash ISA and one Junior Stocks and Shares ISA¹⁵.

The two accounts do not have to be with the same provider. A child can hold a cash Junior ISA with one firm and a stocks and shares Junior ISA with another, and each is opened and managed separately¹⁶. Some providers offer both types, but there is no requirement to keep them together.

There is one further restriction that matters when a child already has savings set aside. A child cannot hold a Junior ISA and a Child Trust Fund at the same time¹⁶. A Child Trust Fund can be transferred into a Junior ISA, but the two cannot run alongside each other. If a child has a Child Trust Fund, moving it across is the route to a Junior ISA rather than opening a second account alongside it.

The limit applies for the whole of childhood. Only one of each type of account may be held during the childhood of the named child, though accounts may be transferred to alternative account managers¹³. So a child who has held a cash Junior ISA with one provider and later moves it to another still holds one cash account, not two.

Cash or stocks and shares: what each type of Junior ISA offers

Two types of Junior ISA are available: cash and stocks and shares, and a child can only have one of each type¹⁸. The regulations describe accounts as being available as cash or stocks and shares products¹⁹. The two work in different ways.

A cash Junior ISA holds money in a savings account. The balance does not rise or fall with markets, and the account is suited to money that may be needed at a known point. A stocks and shares Junior ISA holds investments, so its value can go down as well as up, and it is generally used for money that will not be touched for a long period.

The table below sets out the main differences.

Both types share the same tax treatment and the same access rule: money cannot normally be taken out before the child turns 18. The difference is what the money is held in and how its value behaves.

The allowance is one figure, split between the two accounts

The Junior ISA allowance is the same for both cash and stocks and shares Junior ISAs²⁰. It is a single combined limit across both types, and it can be split between a cash Junior ISA and a stocks and shares Junior ISA in any proportion⁴. The total paid in across both accounts must not exceed the annual limit²².

That means a parent or guardian can put the whole allowance into one type, or divide it between the two. A child with one of each type has the allowance split across both accounts²³. The split is a choice, not a fixed rule, and it can be changed from year to year.

The Junior ISA allowance is separate from the adult ISA allowance. The adult £20,000 allowance can be split across different types of ISAs, such as cash ISAs and stocks and shares ISAs²⁴, but that is a different allowance from the one that applies to a child's Junior ISA.

Moving money between a cash and a stocks and shares Junior ISA

Money can be moved from a cash Junior ISA into a stocks and shares Junior ISA, and from a stocks and shares Junior ISA into a cash Junior ISA⁷. The regulations allow all or part of previous years' subscriptions to be transferred between the two types for the same named child, and where the current year's subscriptions are being transferred, all of the current year's subscriptions must move together¹³.

In practice, whether a partial transfer is possible depends on the provider. Some providers allow all or part of a cash Junior ISA to be transferred into a stocks and shares Junior ISA²⁷. Others only accept the whole account: one provider states that a Junior Cash ISA can be transferred in full or in part if the current provider allows it, but a Junior Stocks and Shares ISA or Child Trust Fund can only be transferred in full²⁸.

A provider's own terms can also restrict what it will accept. One building society states that transfers from stocks and shares ISAs into its Junior Cash ISA are not permitted²⁹. That is a provider rule rather than a rule of the Junior ISA itself, and it means the direction of a transfer can matter as much as the type of account.

The process is the same as any other ISA transfer: the new provider is asked to arrange it, and the money moves directly between the two accounts rather than being withdrawn and paid back in. The How to transfer a Junior ISA page sets out the steps.

Where Junior ISA transfers do not apply

A Junior ISA can only be transferred to another Junior ISA⁹. The adult transfer rules allow a cash ISA or a stocks and shares ISA to move into any other type of ISA except a Junior ISA¹⁰. So money cannot move from a child's Junior ISA into a parent's ISA, and it cannot move from an adult ISA into a child's Junior ISA.

A Junior ISA also cannot be transferred into an adult ISA when the child turns 18. At that point the account becomes an adult ISA, which is a change of status rather than a transfer between accounts. The What happens to a Junior ISA at 18 page explains what changes.

There is a further limit on transfers between stocks and shares accounts. A transfer to a new stocks and shares account must comprise all of the subscriptions held in the old stocks and shares account immediately before the transfer¹³. In other words, a stocks and shares Junior ISA moves as a whole, while a cash Junior ISA may be able to move in part.

Who provides Junior ISAs in the UK

Junior ISAs are offered by banks, building societies and investment platforms. Some providers offer only one of the two types. NS&I, for example, offers a cash Junior ISA and states that it does not offer a stocks and shares Junior ISA¹¹. Its cash Junior ISA is described as an easy way to build up savings tax-free³⁰.

Providers that accept transfers in from other Junior ISAs include investment platforms that take cash Junior ISAs, stocks and shares Junior ISAs and Child Trust Funds³¹. The range of providers and the terms they offer vary, and the Junior ISAs explained page covers the market in more detail.

What protects a Junior ISA holder

Junior ISA money is held in the child's name and cannot normally be taken out before the child turns 18. The account is a tax wrapper, so the money inside it is not taxed in the same way as an ordinary savings or investment account.

Where a provider is a bank or building society, cash held in a Junior ISA is covered by the Financial Services Compensation Scheme in the same way as other deposits with that firm. Where the provider is an investment platform, the investments are held separately from the firm's own assets. The How your ISA is protected page explains how the protection works and where it stops.

If something goes wrong with a transfer or an account, a complaint can be made to the provider first and then to the Financial Ombudsman Service if it is not resolved. The Complaining about an ISA provider page sets out the process.