Few parents and grandparents will soon be unaware of the existence of Junior Isas (Individual Savings Accounts), which will officially be available from next Tuesday.

High street banks have not been rushing to launch a Jisa, leaving the early field open to the Nationwide and Skipton building societies, and fund groups including Witan, Fidelity, Hargreaves Lansdown and The Share Centre.

A large swathe of children under the age of nine will not be eligible – all those who already have Child Trust Funds (CTFs), which covered all children born between September 1, 2002 and January 1, 2011.

Free gifts and other incentives are already on offer to encourage parents to open these mini-me versions of adult Isas for offspring who are eligible.

Lobbying by the savings industry led the Coalition Government to introduce Junior Isas after it announced the withdrawal of Child Trust Funds.

The main difference is that there will be no Government hand-outs with Jisas as there were with CTFs. It will be up to families to put their own money into the new schemes.

Up to £3600 can be invested per child per tax year in a Jisa. Lump sum and regular monthly savings options are available.

Although a scheme has to be opened by a person with parental responsibility, anybody can contribute the money.

With family budgets under strain, it is expected much of the money will come from grandparents.

As with the adult version, there will be cash and stocks and shares Jisas. Investors can choose one or the other, or split their money between the two, providing the overall contribution does not exceed the £3600 limit. The money will be locked away until the child reaches the age of 18.

The main selling point of Jisas is their apparent tax benefits. Savings will be free of income tax and capital gains tax.

However, the same tax concessions are already available in existing products.

What providers are not stressing is the potentially low, sub-inflation, returns on offer from the cash versions of Jisas, or the potentially damaging costs that could be levied on stocks and shares Jisas. Providers are making much of how Jisas can be part of young people’s much-needed financial education, as well as saving for future education and housing costs.

Parents and grandparents will have to wise up to the attractions or otherwise of different accounts. The Nationwide’s 3%, for instance, includes a 0.9% bonus for the first two years only. The Skipton’s 3% has no strings attached – but the rate is variable.

It will be interesting to see whether the high street banks, not noted for their savings rates, will match these.

Stocks and shares Jisas should outperform cash Jisas in the long-term, especially as cash savings accounts are “effectively making a loss” due to inflation, says the Association of Investment Companies. Yet nearly half of parents who want to take out a Jisa say they will opt for a cash-only version.

James Frost, marketing director for the Witan investment trust, argues: “(Our) Junior ISA is a simple, straight-forward and transparent product that will appeal to those looking for long-term exposure to global equities.”

Jisas are great for savings and investment institutions. They can attract new savers at a time when low interest rates and unpredictable stock markets have depressed their inflows – and they can lock in the cash as it cannot be withdrawn.

No wonder Witan is offering a £25 John Lewis Gift Voucher for each of its Jump Junior ISAs opened in 2011, and Hargreaves Lansdown is giving away a Pedro the Penguin money box to those who subscribe £1,000 or more to its scheme.

But are Jisas such good news for families? It is already possible for children to receive interest on savings accounts free of tax if they are registered as non-taxpayers. Existing investment trust savings and investment schemes for children can also be set up tax efficiently with no extra income tax or capital gains tax to pay.

Baillie Gifford, for instance, already offers straightforward investment trust savings schemes for children which are free of dealing costs.

James Budden, Baillie Gifford’s head of retail marketing and distribution, argues: “Many consumers may be seduced by the Isa tag but may end up shelling out more for the same thing.” That is because costs are a key consideration. Charges expert Ed Moisson, head of UK research at Lipper, says: “The lack of awareness of annual charges is an unfolding tragedy. It is essential parents scrutinise the charges their children’s investments will bear.”

Another potential drawback of Jisas is that the child will be able to access the money at age 18. If the maximum amount has been invested each year from birth, the total value at age 18 could be well reach in excess of £100,000. Although the money can be rolled into an adult ISA, there will be nothing to stop an 18-year-old splurging it on a fast car or a shopping spree.

By contrast, an adult who sets up, say, an ordinary investment trust savings scheme can retain greater control, withdraw money if necessary to meet other family emergencies in the meantime, and decide the right time to hand the proceeds over to the child.

No one disagrees that saving for children’s futures is important, but whether Junior ISAs are necessarily the best way to save for them is another matter.

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GLASGOW solicitor Mike Graham, 62, admits the birth of his first granddaughter, Ursula, in January has mellowed him. It has attracted him to the idea of opening a Junior ISA on her behalf.

He says: “When our own children were growing up we were always there to help them but I felt they should make their own way in life.

“The idea of building up a fund for my granddaughter is a bit of a departure for me but I think that it is going to be tough for her generation in 18 years time.

“Although at the moment Scottish students aren’t being asked to pay the high level of university tuition fees which students in England will be faced with, I rather doubt that Scotland will remain an exception for very much longer.”

He has already signed up for details of Witan’s Junior ISA scheme. He says: “As I hold some investment trusts myself I know they can do a good job over the long term.”