If your children received money as gifts this Christmas, you might be thinking of putting at least some of this away for them into a savings account to see it grow and help teach them the value of investment.  A popular choice for a child savings account is a junior cash ISA – but unless you’re careful which account you choose, your child’s Christmas cash could actually end up losing value.

The reason for this is the inflation rate, which currently stands at 3.1%.  At the moment, only three junior cash ISAs on offer in the UK offer a rate which beats this: the Coventry Building Society Junior Cash ISA, offering 3.5%; the Nationwide Smart Junior ISA, offering 3.25%; and the Tesco Bank Junior Cash ISA, offering 3.15%.

Other junior cash ISAs currently offer far lower rates, with some of the lowest including the Loughborough Building Society (1.7%), the Ipswich Building Society (1.6%) and the Dudley Building Society (1.4% for amounts up to £2,500, rising to 2.5% for amounts over that). With £858 million paid into junior ISAs during 2016-17, and over 60% of that being held in cash accounts, many parents might find that the money they’ve put away for their child to access in the future may actually be worth less each year.

If you’ve already invested money into a junior cash ISA for your son or daughter and you’re not happy with what it’s paying, make sure you take action and transfer the money to an account with a bank or building society offering a better rate. Another option is to transfer some or all of the funds into a junior stocks and shares ISA offering a better rate. Unfortunately, no adult ISAs on the market are currently offering an inflation-beating rate, so once your child turns 18, you’ll need to consider what to do with their savings in order to prevent them from losing the value you’ve protected.