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There are two different types of ISA For Children but both are tax free. A stocks and shares Junior ISA an investment savings account where you can keep your shares and stocks and any interest / profit earned will not be subject to capital gains tax. A Cash Junior ISA (or Junior Cash ISA) is a tax free childrens savings account where you just pay money in. It works life a regular childrens savings account but the funds cannot be withdrawn until the child reaches adulthood. There are a few providers now offering a Junior Cash ISA, all with varying Junior ISA Rates. Every eligible child is permitted to hold both a cash and an investment Junior ISA at the same time.
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