Monzo Launches Fee-Free Junior Stocks and Shares ISA for Children

Monzo has introduced a junior stocks and shares Isa (Jisa) that enables parents and legal guardians to manage savings for a child's future. The digital challenger bank is waiving its platform fees for this account, making it a potentially cost-effective option for long-term child savings.

Parents who are already Monzo customers can open and manage the Jisa directly within the Monzo app. Each child has an annual Jisa allowance of up to £9,000, separate from an adult's £20,000 allowance. This allows for substantial potential growth over time, particularly when funds are invested.

The Jisa operates under specific rules: only parents or legal guardians can open the account, and the funds are locked until the child reaches 18 years old. For long-term savings vehicles like Jisas, investing rather than holding cash is often recommended due to the potential for higher returns that can outpace inflation over extended periods. However, investing carries inherent risks, and the value of investments can fluctuate.

Monzo's Jisa does not charge account fees, but underlying fund management fees are still applicable. These are levied by the investment manager, not Monzo directly. For Monzo's ready-made funds—adventurous, balanced, and careful—the ongoing charges are 0.14%, managed by BlackRock. This compares favorably to some competitors, such as Moneybox, whose ready-made funds (managed by Amundi) have ongoing fees of 0.29%, with additional account fees of 0.15% or higher depending on investment choices.

Other platforms also offer junior Isas. For example, Hargreaves Lansdown charges no account or dealing fees for its Jisa. Freetrade also provides a Jisa with no account or dealing fees. While Monzo's Jisa is attractive for its lack of platform fees, it's important for savers to consider the underlying investment costs and whether they align with their financial goals.