Junior Stocks and Shares ISA (JISA) is a tax-efficient way to build savings for your child. And since they can’t touch it until they’re 18, that gives them plenty of time to work their magic, assuming the account is opened at a juvenile enough age.

Here’s how investing £150 a month in a newborn baby can result in a surprisingly enormous sum less than two decades later.

JISA are fantastic

To start with, I think it’s worth pointing out some of the advantages of JISA. Because while only a parent or legal guardian can open an account for a child under 16, relatives and even friends can also deposit money into the account once it has been opened.

In the 2026/27 tax year they can contribute up to £9,000 a year in total. And like a standard Stocks and Shares ISA, there is no tax on profits or dividends.

As mentioned, the real benefit is that the money is locked up. A child cannot touch cash until he or she is 18 years ancient. At this point the account automatically converts to an adult ISA and your child has full control.

Please note that tax treatment depends on each client’s individual situation and may change in the future. The content of this article is for informational purposes only. It is not intended to be and does not constitute any form of tax advice. Readers are responsible for conducting their own due diligence and obtaining professional advice before making any investment decisions.

Long-term investing

Let’s say someone starts with a lump sum of £1,000 in their account and then invests another £150 each month. This would amount to £1,800 per year.

By 2045, just over 18 years from now, JISA will raise to around £85,475 (excluding transaction fees). This assumes an annual return of 9%, which I believe is achievable given the total annual return on investment FTSE100 over the last decade it was around 9.4%.

Of course, there is no guarantee that the comeback will continue in the future. However, given that many high-quality UK shares return much more than 9.4% per annum, I consider this level of return to be realistic.

Beautifully dull

What type of shares should the JISA custodian consider purchasing? Well, considering we are investing for our loved one, I wouldn’t take unnecessary risks with penny stocks.

Instead, I would like to focus on established companies that pay dividends and have a solid track record. This is a great example for me 3i Infrastructure (LSE:3IN).

It is a company listed on the FTSE 250 index that invests in private companies providing imperative infrastructure services. Basically, these are things that would make a 10-year-old yawn, but would lend a hand the company achieve its goal of delivering a total return of 8-10% per year over time.

3i Infrastructure has extensive experience in selling assets at a significant premium upon maturity. Earlier this month, it agreed to sell its 71% stake in airport equipment company TCR for €1.14 billion (about a 50% raise on almost a year).

With the funds obtained, it plans to repay revolving loans and invest in novel assets. However, its £212m investment in German fiber operator DNS:NET is likely to be reduced to zero. So there is a risk that everything will not always be fine.

However, I consider this failure a scarce outlier because the rest of the portfolio is performing well. The forecast dividend yield is 4%, and 3i Infrastructure has raised this dividend every year for almost two decades.

Overall, I think this is a quality product worth considering.