How saving £25 a month into a Junior cash Isa could set your child with almost £11,000 when they turn 18

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PUTTING away £25 a month into a Junior Isa could give your child almost £11,000 by their 18th birthday.

A Junior ISA is a tax-free savings account for under 18s where you can save up £9,000 a year.

Hardgreaves Landsown say you could save nearly £7,000 from £25 a month in a cash JISA alone

There are almost one million Junior Isa accounts open in the UK – but this means MILLIONS of kids are still missing out.

The annual allowance was more than doubled last year to £9,000. That’s the amount you can save tax-free each year.

As the tax year ends on April 5, you have just five days to open an account and make the most of this year’s allowance.

But we want to show you how easy it is to build up a decent pot of cash for your kid by only saving £25 a month.

When you open a JISA, the first decision you need to make is between a cash JISA or a stocks and shares JISA. 

Over 70% of Junior ISAs opened are cash savings products.

The cash option is safer, so it’s usually the one people are drawn to first.

Your money is protected up to £85,000 and you know the interest rate is guaranteed.

While stocks and shares JISA can provide a bigger return, you are gambling with your cash.

Investment is always a risk as your money can go up as well as down.

You should never invest money you can’t afford to lose.

How £25 a month turns into almost £11,000

Calculations by Hardgreaves Landsown for HOAR show if you were to invest £25 a month in the top paying cash JISA at the moment, you might earn 2.5% for 18 years and could end up with a nest egg of £6,825. 

With a stocks and shares ISA the rates and interest earning an average of 5%, the same monthly contribution could grow to £8,766.

And if it grew at an average of 7% you could then end up with £10,831.

If you could bump your monthly payments up to £35, under the same assumptions, cash could build to £9,555, investments growing at 5% to £12,273 and investments growing at 7% to £15,163.

You can’t withdraw cash from a JISA until your child turns 18.

We’ve told you before how you can give your child £18,000 on their 18th birthday by saving just £1.67 a day.

There’s even the chance to make your child a millionaire by the time they are 65.

Money saving expert, Martin Lewis, has explained how you need to put £1 in a LISA if you hope to buy your first home in the next 10 years.

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