NatWest has launched a junior stocks and shares Isa available through its digital investment services.
The new Jisa, available through NatWest Invest and Royal Bank Invest, will allow up to £9,000 to be saved in a tax-free structure each year until the child turns 18.
Customers can choose between five different funds, managed by Coutts, offering different levels of risk and they can transfer existing Jisas or child trust funds into NatWest’s new Jisa with no charge.
Nick Johnson, investing journey lead at NatWest said: “Starting a junior Isa for a child is a really great way to give them a head start at the age of 18 and, as they get older, teach them about the benefits of saving for their future.
"We hope to encourage the next generation of investors and ensure as many people as possible have the right tools to help make their money go further.”
The bank said research had shown 83 per cent of UK parents currently saving for their children are doing so in cash, which puts their savings at risk when inflation rises.
Mohammad Kamal Syed, head of asset management at Coutts, said: “Our research shone a light on what we know is happening - that cash remains king.
"Unfortunately, only saving in cash exposes customers to the corrosive impact of inflation. In the current economic climate, the real-life purchasing power of your savings will actually decrease over time if held in cash."
He said giving people the freedom to choose the fund that suits them it expected to encourage more engagement with investments.
"We want to see more people aware of the benefits of investing and hope the Jisa is one way to do that,” he added.
The Jisa funds also meet Coutts’ commitment to climate change with “stringent ESG criteria” applied across all investment products.
Coutts is a member of the Net Zero Asset Managers initiative, which means it has committed to achieve net zero across all its investments by 2050.