To get the most out of a Junior ISA (JISA), it’s best to start early and save on a regular basis. Not only will this help increase the value of your nest egg, it can also encourage good investment habits for both you and your child.

Here are five good reasons to invest in a JISA:

Junior ISA limits and allowances

A JISA - like a standard ISA – is effectively a tax-efficient wrapper allowing you to invest up to £4,368 in 2019-20, either in cash or stocks and shares. This allowance is on top of your regular ISA-savings allowance (£20,000). Remember, there is no capital gains tax (CGT) to pay on investment gains, and investment within this wrapper can grow in a tax-efficient environment.

When can my child access their JISA?

Money invested in a JISA is locked away until a child’s 18th birthday, so these are ideal longer-term investment plans. If you start saving when your child is young you’re looking at a 15-year-plus horizon. This means you could think about a more adventurous strategy, for example putting money into investment trusts that have exposure to emerging markets. These may be more volatile over shorter time frames but have the potential to deliver higher returns over the longer term.

How much do I need to open a JISA?

You don’t need to have a large lump sum or be especially wealthy to open a JISA. Most providers offer regular investment plans that can be opened from as little as £25 per month.

Even relatively small amounts can build to a sizeable sum over long periods, particularly when compound returns are taken into account – in other words, getting returns on your investment returns. Regular savings plans also help smooth out stock-market movements; ideal for those investing in more adventurous sectors.

Who can contribute to a Junior ISA?

Parents are not the only ones who can save into a JISA. Grandparents, godparents and family friends can all contribute, provided the total invested does not exceed £4,368 in the 2019-20 tax year. These contributions do not affect the donor’s own ISA allowance.

Educational benefits of Junior ISAs

Investing in a JISA can help you demonstrate good savings habits and highlight the growth potential of equities to your child. The rewards of this may last even longer than the JISA plan itself. J.P. Morgan Asset Management offers a variety of investment trusts suitable for Junior ISA investment. This includes our multi asset trust, JPMorgan Elect Managed Growth as well as more adventurous options, investing in a range of global markets. The JPMorgan Emerging Markets Investment Trust for example, may be an option for parents with a longer-time investment horizon.