This is our independent Beanstalk Junior ISA review.
Beanstalk is an app-only Stocks and Shares ISA and Junior ISA (JISA) provider designed to be simple and straightforward to set up and manage.
It’s backed by KidStart, the shopping club for parents that has more than 15 years of experience in helping families save for their children.
Read on for our full Beanstalk Junior ISA review, or use the table of contents to skip ahead.
Table of Contents
What is an ISA?
An Individual Savings Account (ISA) is a type of savings and investment account that is free from tax on the income and gains made within it. They’re government sanctioned accounts and are a great way to save money for your future.
There are 4 main types of ISA for adults:
- Cash ISAs
- Stocks and Shares ISAs
- Lifetime ISAs (LISAs)
- Innovative Finance ISAs (IFISAs)
The ISA annual contribution limit is currently £20,000, which can be spread across the main types of ISAs above. But, the Lifetime ISA has an annual allowance of £4,000 so you cannot contribute more than this in one year to your LISA.
What is a Junior ISA?
Junior ISAs are savings and investment accounts that were set up to replace Child Trust Funds (CTFs) as a tax-efficient way of investing or saving for a child.
They must be set up by the parent or guardian of the child but, once set up, anyone can contribute to them. That means your child’s grandparents, for example, can contribute directly to your child’s Junior ISA.
As with adult ISAs, Junior ISAs are also free from the taxes typically associated with savings and investments. This means a Junior ISA will be free from the following taxes:
- Income tax on any interest earned
- Dividend tax on any dividend income received
- Capital gains tax on any increase in the value of investments held in the Junior ISA
To set up a Junior ISA, the child can be any age as long as they’re under 18. Money contributed to a Junior ISA is locked away until the child turns 18. As parent or guardian, you have control over investments in the Junior ISA until control of the account passes over to the child when they turn 18.
Currently, the annual allowance for contributions into a Junior ISA is £9,000. There are two types of Junior ISAs – a Stocks and Shares Junior ISA and a Cash Junior ISA.
Each child is allowed to have one of each until the age of 18, but there’s a contribution limit of £9,000 in total between them in a single year.
There are rules that allow a 17 year old to use both a Junior ISA annual allowance (currently £9,000) and a Cash ISA annual allowance (currently £20,000) in the year they turn 18. This means up £29,000 of tax-efficient saving in one year!
Beanstalk offers a Junior Stocks and Shares ISA and, unsurprisingly, this is what we focus on in our Beanstalk Junior ISA review. For more on Junior ISAs, read our guide to the best Junior Stocks and Shares ISAs, which features Beanstalk.
What is Beanstalk?
Beanstalk is an app that allows you to open both an ISA for yourself and a Junior ISA for your children.
It’s focused on simplicity and allows you to open an account in minutes, with two investment options and no minimum deposit to get started. There are lots of useful features built into the app, too, such as the KidStart round-up function.
The round-up feature is something we really like. It allows you to ‘round-up’ purchases to the nearest pound, with the difference being automatically deposited into your child’s Junior ISA. This is a great way to passively contribute to a Junior ISA and you can switch the feature on or off through the app.
You can make instant top-ups via the Beanstalk app and get money back on your shopping. Plus, Beanstalk won ‘Best Junior ISA’ at the 2022 and 2023 Good Money Guide Awards.
Beanstalk also allows you to transfer Child Trust Funds to its Junior ISA.
Who is Beanstalk for?
If you want to start saving for your child’s future and don’t know where to start, or are confused by all the options out there, then Beanstalk is an ideal choice.
It’s designed to be simple and easy-to-use and based on our testing of its app (more later in this Beanstalk Junior ISA review) we can confirm that it is.
Beanstalk’s fees are also simple and clear – they charge 0.50% on the value of your investments with them (underlying fund charges apply on top). There are no subscription fees or dealing fees that you typically get with the well-known investment platforms.
So, if you want simplicity and clear pricing with a great app to manage everything from, then Beanstalk is a great choice.
Beanstalk Accounts and Products
There are two account options with the Beanstalk app. You can open either a standard Stocks and Shares ISA (for adults) or a Junior Stocks and Shares ISA for your child.
You can also transfer an existing Stock and Shares Junior ISA to Beanstalk and there are no charges for doing so.
One of the major benefits of the Beanstalk app is that once opened, anyone can be invited to contribute to the Junior ISA. Beanstalk makes this easy to do, too – you can invite people directly through the app and the information required is sent to them.
This is a great feature to get other family members set up to contribute, such as grandparents.
There’s no requirement to make regular contributions and there are no minimum top-ups either, so you have lots of flexibility.
Using open banking technology, Beanstalk can link to your bank account and ‘round-up’ your spending to boost your savings.
For example, if you buy a coffee for £2.50 using your bank card, Beanstalk will round this up to £3 and the extra 50p goes into your child’s Beanstalk Junior ISA.
It’s a simple and efficient way of making regular contributions to your child’s ISA fund and means you can passively contribute over time. You can turn this feature off anytime, too, so you have full control over it.
With a Beanstalk Junior ISA you can choose from two funds to invest in. This limited choice is deliberate, as Beanstalk tries to make investing as easy as possible.
The two funds are the Fidelity Global Index fund and Legal & General Cash Trust fund.
Fidelity is one of the largest investment managers in the world (with trillions of dollars under management!) and their Global Index fund is a tracker fund. A tracker fund is a type of passive fund that replicates the performance of an equities index.
In this case, it tracks a global stocks index which gives exposure to major public companies from all over the world. In reality it’s US-centric, as the US stock markets are by the far the world’s largest.
Tracker funds like Fidelity are a great low-cost way to get exposure to the equities markets.
The Legal & General Cash Trust fund is a ‘money market fund’. These are funds where investors’ money is pooled together to invest in assets that generate an income. Usually these assets are bonds (fixed income securities) and money market instruments (short term debt, usually issued by large companies or governments), or deposited with banks.
The income generated is passed on to investors (after fees). Money Market Funds have become popular as interest rates have risen, as they are seen as low risk but have competitive yields (cash returns).
You should check if you can get a better rate of return in a Cash Junior ISA before opening a stocks and shares Junior ISA and putting money into a money market fund, as the rates may be better.
Fortunately you don’t have to pick between the two funds – you can choose how much to invest in each of them, or put all of your cash into just one of them.
If you’re new to investing, or simply don’t have the time to do your own research, then Beanstalk’s simple offering will suit you. On the other hand, if you’re a more experienced investor you may prefer more choice over your child’s Junior ISA investments with another provider, such as AJ Bell – which has a huge range of funds.
Beanstalk Junior ISA Review: Minimum Investment
The Beanstalk Junior ISA has no minimum deposit, but to invest in the available funds there is a minimum investment of £10.
Beanstalk’s £10 minimum investment applies to one-off investments and regular investments.
Beanstalk App Review
To get started, download the Beanstalk app and register with your details to open either an ISA for yourself or a Junior ISA for one or more children.
You’ll be asked to provide your name, address and other basic information to set up your account.
You can also see a reminder of some of the features in the Beanstalk app:
Once you’ve completed the initial registration, you’ll be asked if you want to set up an ISA for yourself or a Junior ISA for your child.
You can then choose which of the two funds you’d like to invest in (or both), and share an invite link with friends and family if they’d like to contribute to the Junior ISA, too.
Beanstalk makes it very simple to go through the setup stages and quickly get invested.
We played around inside Beanstalk’s app for this review and it’s very easy to navigate, with a clear layout:
Adding funds is simple to do, too, and you can enter details of a family member in the app and they’ll be invited to contribute to your child’s Junior ISA.
Beanstalk keeps it simple – and for many people that will be one of its major benefits.
Beanstalk Fees & Charges
There’s a 0.5% annual fee on your investments. That’s it – Beanstalk doesn’t charge any dealing charges or subscription fees. You won’t be charged until you start investing, either.
The fund you invest in will also have an underlying annual fund fee of 0.12%-0.15% depending on which you choose. These are charged by the fund managers regardless of the investment platform.
Although Beanstalk’s pricing is simple, it’s not the cheapest Junior Stocks and Shares ISA platform. Hargreaves Lansdown charges no fees at all – read more in our guide to the best Junior stocks and shares ISA.
Is Beanstalk Safe?
Beanstalk is authorised and regulated by the Financial Conduct Authority (FCA) through KidStart Limited.
The FCA is the UK’s regulator of financial companies (there’s also the PRA which regulates Banks). FCA authorisation and regulation is the first sign we look for when reviewing the safety of investment platforms and banking apps.
Beanstalk also has Financial Services Compensation Scheme (FSCS) protection, which guarantees up to £85,000 of your money in the event that the company holding it goes bust.
So, Beanstalk has the relevant approvals and protections in place. But, as with all investing, your capital is at risk and the value of your investments may rise or fall.
Beanstalk Customer Service
To get in touch with the Beanstalk team you’ll need to email them. It’s a little disappointing that there’s no in-app chat, considering the other great features it has. There’s also no phone support, which may frustrate some.
Having said that, Beanstalk says it will reply within 1 working day to customer support emails.
Beanstalk Customer Reviews
Beanstalk has a rating of 4.5 on Trustpilot, from over 60 reviews. This means it’s rated as ‘excellent’. Some reviewers comment on how easy to use the app is, and how simple it is to get started saving for your kids.
A few reviews mention difficulties with the initial setup when linking their bank account to the app so that they can make use of the round-up feature. Overall, though, reviews are overwhelmingly positive.
On Apple’s App Store, Beanstalk has a 4.6 rating from more than 380 ratings which again suggests many satisfied customers.
Beanstalk has also gained recognition for its Junior ISA by winning the ‘Best Junior ISA’ at both the 2022 and 2023 Good Money Guide Awards.
Beanstalk Junior ISA Review: Pros and Cons
Here’s a summary of what we view as the main pros and cons of Beanstalk’s Junior ISA.
- Fast and easy Junior Stocks and Shares ISA setup
- No minimum investment
- No regular/direct debit investment required
- User friendly app
- Round-up feature automates saving for you child
- Easily invite relatives and others to contribute to your childrens’ Junior ISAs through the app
- Fast deposits to add funds to your accounts whenever you want
- Simple pricing with no dealing fees or subscription charges
- App-only, so you must be comfortable with no online web log in
- No in-app chat or phone support (email support only)
- Limited investing options
- Annual fee of 0.5% can be beaten by other providers
Final Verdict: Is Beanstalk Junior ISA any good?
Beanstalk is a user-friendly, easy to setup app for opening and holding a Junior Stocks and Shares ISA. It has some great features which we really like, such as its round-ups on spending which automate savings.
Beanstalk is focused on simplicity, convenience and useful features. If you want to quickly open a Stocks and Shares Junior ISA without spending time going through the myriad of options out there then you’ll like Beanstalk.
If you prefer to be more hands-on with the investments in your child’s stocks and shares junior ISA then you may prefer Hargreaves Lansdown which has thousands of investment options and no platform fees. For more sophisticated passive investing you should consider Moneyfarm.