Setting up a Lifetime ISA for Under 40s is vitally important. You get your child, whatever you think is the best and you are happy to take the extreme of the pain to ensure the smile in the faces of your child. But, does good parenting simply imply giving the supply of the materialistic stuffs that your child might want? Obviously not. It is actually giving a good life and securing the future of your child. Hence, opening the Junior individual savings account in the name of your children turns inevitable as it is the simplest approach to secure their future.
What is the scheme of Junior ISA?
The Junior ISA scheme is among one of the options in the portfolio of the individual savings account. This form of ISA gives you a tax-effective solutions to save and invest in favor of your child. Contrary to the usual practices of savings account, wherein the interest earned gets taxed, this account is exempted from tax liability, both for savings and investment perspectives.
How to open the Junior ISA?
The best part about the junior individual savings account is that you can open an account in the name of your child, the moment they are born. You can continue the scheme till the child attains the age of 18. However, if your child had attained the age of 16 or 17, you can inspire him/her to get an account on his/her individual name. You can open the account either, on branch base orientations or you can choose the online orientations as well. You are allowed to choose the service provider as per your choice and you can even shift from one provider to another, or from one scheme to the other.
Why the scheme comes so effective?
The scheme had been designed in a style that the child will not have access to the fund until the attainment of 18 years of age. The parent or the legal guardian can open the account, immediately after the birth of the child. Hence, it ensures that you get the longest span of time to develop a significant fund value to secure the future of your child. The fund comes very beneficial to finance the higher studies for the children or in instances of any lump sum amount, after the child had grown into an adult.
The payable allowance for the Junior ISA
To incentivize parents for offering the Junior ISA, there is the provision of getting yearly allowances. The rate gets altered for every tax year, that starts on the 6th day of April every year and continues till 5th April of the following year. For the tax block of 2015-16, junior ISA account holders will be entitled to the receipt of 4,080 Pounds as the annual allowance.
The Junior ISA is indeed the smartest and most effective way for the parents to secure the future of their child, financially. The best part is that the scheme benefits the financial interest of the parents as well, through the scheme of tax rebate.