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Children's savings accounts

Best children's savings accounts

By Chiara Cavaglieri

Article 2 of 3

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Best children's savings accounts

This guide will help you find the best rates for your children's savings with our unique tables.  

Best children's savings accounts

The tables below show the best children's savings accounts currently available. Providers are fully covered by the Financial Services Compensation Scheme (FSCS) and the accounts are available nationally, although it's worth checking the rates paid by smaller building societies in your area to see if they can do a little better.

We've included the best regular savers – which set limits on the amount you can save every month – as well as top easy-access and fixed-rate savings accounts. 

Regular savings accounts for children 

Regular savings accounts tend to pay the best rates, but access is limited and you are required to pay in money each month. 

Some regular savers reduce the interest rate if you miss a monthly payment, but none of the accounts in our table does this. 

Account Interest  Access Restrictions Age to open Customer score
Halifax Kids' Regular Saver 4% a  Branch  No withdrawals allowed; Save £10-£100 per month  0-15 yrs 48%
Saffron BS Children's Regular Saver 4% b Branch, Post Save £5-£100 per month  0-15 yrs n/a
Nationwide FlexOne Regular Saver 3.5% c Online, Branch  Save £1-£100 per month 11-17 yrs 61%
Barclays Children's Regular Saver 3.5% d Branch Rate drops to 1.51% if you make a withdrawal; Save £5-£100 per month  0-17 yrs 49%
Table notes:
Rates correct at March 2017

a Transfers to Young Saver account paying 2% after 12 months
b Rate drops to 0.05% if balance falls below £5; transfers to Maturity Easy Access account paying 0.5% after 12 months
c Must open linked Nationwide FlexOne current account; transfers to instant access savings account at age 23
d Transfers to Instant Saver account after 12 months; parents with a Barclays current account can access the account online/by phone on behalf of their child

Easy-access savings for children 

If you want your child to be actively involved, an easy-access account is the obvious choice. As the name suggests, you or your child can add and withdraw money from an easy-access savings account at any time. 

Interest rates tend to be lower than that of regular savers and fixed-rate accounts, but these accounts are ideal if your child wants to save their pocket money for a specific treat. 

Bank accounts for children are another useful tool for developing money management skills. The top payer is the Santander 123 Mini which pays 3% interest on balances of £300 to £2,000. 

Account Interest  Access Restrictions Age to open Customer score
HSBC My Savings 2.75% a Online, Branch, Phone  Under 11s need parents permission to withdraw £50+ 7-17 yrs 48%
Nationwide Smart Limited Access 2.25% b Online, Branch  Rate drops to 0.25% if you make two or more withdrawals per year 0-17 yrs 61%
Lloyds Young Saver 2% c Branch    0-15 yrs 50%
Skipton BS Children's Saver Issue 2 1.75% d Branch, Post   0-17 yrs 56%
Virgin Money Young Saver Issue 4 1.75% e Branch, Post  Cash withdrawals in-branch only f 0-15 yrs 52%
Kent Reliance Peter Pan Children's Savings 1.6% g Branch, Post  Children aged 7-12 can withdraw up to £100 per day 0-17 yrs 57%
Table notes:
Rates correct at May 2017

a 2.75% up to £3,000 then 0.25% above this; MyAccount current account with debit card available at age 11
b Must open in-branch unless existing Nationwide customer; save from £1-£50,000
c Pays 2% up to £20,000 then 0.25% above this; account also offered by Halifax and Bank of Scotland
d Save from £1 up to £50,000
e Save from £1 up to £25,000
f Virgin Money branches at Houndsditch, Haymarket, Enfield, Golders Green, Bromley, Croydon
g Must open by post or in-branch; minimum balance £10

Fixed-rate savings for children 

Fixed-rate savings accounts, also known as bonds, require you to tie your money up for a specific term, typically between one and five years. Withdrawals are generally not permitted at all, and providers that do allow you to take money out will charge a penalty. 

The reward for this inflexibility is a higher interest rate – see our table below for the best offers. The risk is that you could miss out on higher interest rates available later on, and be stuck with an uncompetitive rate until the fixed term comes to an end. 

Account Interest  Access Restrictions Age to open Customer score
Cambridge BS Children's Fixed Rate Bond Issue 1  2% a Branch Post  No withdrawals allowed or early closure allowed 0-15 yrs n/a
NS&I Children's Bonds Issue 36 2% b Online Phone Post Penalty of 90 days' interest for cashing in early 0-16 yrs 61%
State Bank of India Jumbo Junior Fixed Deposit 1.5% c Branch Post  No withdrawals allowed or early closure allowed 0-15 yrs n/a

Table notes:
Rates correct at May 2017
 

a 2% for 3 years paid on balances from £1,000 to £20,000
b 2% for 5 years paid on balances from £25 up to £3,000
c 1.5% paid for 5 years on balances from £1,000 to £100,000; State Bank of India also pays rates of 0.5% to 1% on bonds fixed for 1-4 years
 

How children’s savings accounts work

Children’s savings accounts generally work in the same way as adult ones, however, you'll need to check with individual providers to see how each account can be opened and managed. 

For example, parents and legal guardians must open the Halifax Kids Regular Saver online or in-branch for their children (under 16s only) and once opened, the account can only be managed in-branch.

Children aged 7 to 17 can open the HSBC MySavings account by themselves in-branch with just £10, although under 16s need a parent/legal guardian to accompany them. The adult must also sign for withdrawals over £50.

Is it better to save in a Junior Isa instead?

You may prefer to make the most of your children's tax-free Junior Isa allowance every year (£4,128 in the 2017-18 tax year). 

Isas are an excellent vehicle for keeping savings tax-free long-term. Junior Isa money is locked away until the child turns 18 – at which point it converts to an adult Isa and the child has full control over the money. 

However, in most cases your child won't pay tax on savings anyway, so it makes sense to check rates across the market. 

One word of warning is that money given by parents/step-parents (other family members are fine) and saved in a non-Isa account is taxable if it generates interest over £100 per year. 

We explain the '£100 rule' in our children and income tax guide. 

  • Last updated: April 2017
  • Updated by: Chiara Cavaglieri
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