Teaching your children about money from a young age is one of the best ways to set them up for later life. Opening a savings account can teach them the importance of planning ahead and sensible spending. Savings accounts for kids often come with higher interest rates than standard savings accounts, but it’s likely there’ll be some caveats too. Compare the best saving accounts to find the right one for you and your little ones.
Best easy access savings accounts
With an easy access savings account, you can withdraw your money quickly and easily. If you have a lump sum of money, this is a great option to grow your money while having the option to spend it when you like.
These accounts were reviewed on 10/09/21.
This account offers a monthly interest rate of 3% AER/ 2.96% gross (variable) on the entire balance once the balance is £1,500 (up to a maximum of £2,000).
There’s no ongoing fee for the account and no overdraft option is available.
You can withdraw up to £300 from the ATM each day, and you’ll also get access to online and mobile banking to manage your money.
You can open this account for your child if they’re under 13 years old, or they can apply online themselves if they’re between the ages of 13 and 17.
With this account, you can start saving with just £10 and earn 2.50% AER (2.47% Gross) on your balance up to £3,000.
When your child turns 11 years old, they’ll get their own debit card. When they turn 18, the account will automatically be transferred to a standard HSBC bank account.
This account is open to any child from the age of 7 to 17.
Best regular savings accounts
With regular savings accounts for kids, you’ll need to pay in money each month without fail. They’re ideal if you have a steady stream of income you want to deposit in a disciplined way.
With Halifax, you’ll earn 3.50% gross/AER fixed for 12 months from when you open the account.
Save between £10 and £100 a month by standing order (you can change this amount at any time). Plus, you don’t have to pay in every month if you don’t want to.
The downside is that to access your money, you have to close the account – you can’t simply withdraw cash when you need it.
This account is open to any child up to the age of 15.
You’ll need at least £5 to open this account, and then you can deposit up to £100 in each month. What’s more, you can withdraw money whenever you like.
It offers an annual interest rate of 3.00/3.02% (gross/AER). So if you deposited £100 a month into your account, you could expect the balance to be roughly £1,219.46 after 12 months.
Your child must be under the age of 15 to open this savings account.
Alternative: save with a Junior ISA
Instead of opting for a bank savings account, you might want to make the most of your child’s tax-free ISA allowance (£9,000 for the tax year 2021/22).
An ISA (Individual Savings Account) is a great way to save money without paying tax on any gains. With a Junior ISA (JISA), any money will be locked away until your child turns 18. At this point, the JISA will automatically become an adult ISA and your child will be able to access, withdraw or continue saving their money as they wish.
You can choose from a cash JISA or a Stocks & Shares JISA. The key difference is that a cash JISA will be kept in cash, whereas a Stocks & Shares JISA will be exposed to the stock market. Learn about the different types of ISAs.
From Tesco Bank to Skipton Building Society, compare the best JISAs available right now.
It’s worth noting that, in most cases, your child won’t pay any tax on their savings anyway. So it’s best to compare the rates on different savings accounts before you make a decision.
Find out more about ISAs with our simple guide.