A rise of 0.25% is now on offer on the National Savings & Investments (NS&I) Junior ISA. This makes it more competitive, but recent increases have also been offered by competitors. 

The NS&I Junior ISA replaces NS&I's children's bonds and has a return of 2.5%. 

The highest rate on offer for a cash Junior ISA is that of Coventry Building Society, whose product pays 3.5%, with Nationwide's Smart Junior ISA offering 3.25% and Tesco's product rounding out the top three at 3.15%. 

There are some non ISA children's savings accounts that pay a greater amount of interest than those mentioned above, however, they are more restrictive. 

An interest rate of 4.5% on monthly deposits of between £10 and £100 is on offer from Halifax as part of their Regular Saver policy, however, this then drops to 2% after one year.

£858 million was invested in Junior ISAs in the 2016/2017 tax year, making them one of the more popular ways of introducing children to the world of saving. Stocks and shares Junior ISAs remain less popular than the cash variety, with cash ISAs making up 61% of all investment in Junior ISAs.

Higher returns could potentially be reached with a Stocks and Shares Junior ISA, given that it's possible to invest for 18 years over the entire term of the product. At age 18, the child has full access to the proceeds of the account. 

An article posted by Telegraph Money in January showed that only three of the available cash versions of Junior ISAs paid a rate greater than inflation.

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The value of investments and income from them may go down as well as up and you may not get back the original amount invested.

Information is based on our current understanding of taxation legislation and regulations which is subject to change.