The best places for children’s money, whether you’re putting money aside for them or if they’re saving their pocket money.
Here’s my guide to the best children’s savings account. Check the date to see when this was last updated.
For more on the pros and cons of the different types of accounts, check out my video below.
Easy access accounts
These can be current accounts for kids or specific savings accounts and are open to anyone under the age of 18.
Rates are usually variable, which means they can change, and are often only on a limited amount of money.
With these accounts your children will be able to manage the money themselves, and once they reach 11 they can usually get their own debit card.
Santander 123 Mini – Up to 3%
This 123 Mini account from Santander offers up to 3% AER (variable) on savings. You’ll get 1% on balances up to £999.99, 2% on the next £500, and 3% on balances between £1,500 and £2,000. So you’ll earn nothing below or above those totals.
Children under 13 will have the account managed by an adult that has parental responsibility for the child and has their own Santander current account. They have to open the account in branch.
Kids between 13 and 18 can apply online. They’ll also be able to get a debit card.
HSBC MySavings – 2.5%
The MySavings account from HSBC pays 2.5% AER (variable) on up to £3,000 saved. Above this amount you’ll only get 0.25%. There’s a minimum deposit of £10.
It’s for kids aged 7 to 17 years old. Once they’ve turned 11 they can get a MyAccount current account with app access and their own debit card.
Under 16’s will need a parent or guardian to open the account with them. Existing HSBC account holders can do this online. Everyone else will need to do it in branch.
TSB Under 19s – 2.5%
This Under 19s account is only for children between 11 and 18, but they can earn 2.5% AER (variable) on balances up to £2,500.
They’ll have a debit card and app banking. To apply they need to make an appointment in branch, and if they’re under 16 they need to be accompanied by a parent or guardian.
Regular Savers
These accounts pay higher rates but you’re limited on how much you can save each month. Usually it’s a fixed rate for a year. When the 12 months is up, the account will close and the money will be transferred to a linked savings account.
Halifax Kids’ Monthly Saver – 3.5%
You can save between £10 and £100 a month into this regular saver with Halifax and earn 3.5% AER (Fixed) for 12 months.
There’s no requirement to add money every month, but you can only withdraw cash if you close the account.
It’s for kids under 16 years old, but you don’t have to be a parent or guardian to open the account – though you do need their permission and a copy of the full birth certificate or passport. A letter will be sent to the parent and they can say they don’t want the account.
You can open it online or in branch.
Barclays Children’s Regular Saver – 3.5%
This account from Barclays also offers a fixed rate of 3.5% for 12 months. Withdrawals are allowed but the rate drops to 1.5% for those months.
You can save between £5 and £100 each month and it’s ok to miss some months. You have to open the account in branch and be a parent or guardian. If you already have a Barclays current account and both the Barclays mobile app and Barclays video banking app you can apply online.
Junior ISAs
You or your child can save £9,000 a year in a Junior ISA. These can be cash ones earning interest or stocks and shares ISAs which are invested (meaning the value can go up and down).
Though interest or gains earned in an ISA are tax-free, it’s unlikely it makes much difference as there are other allowances that will be more than enough for most kids.
However, you can earn interest on larger sums than with the easy-access accounts.
Money in Junior ISAs is also locked away until the child turns 18. Then it’s their money to use as they want.
Parents or guardians have to open the account but anyone can add money – handy for grandparents and other family members who want to put money aside.
I’m only listing cash ISAs here.
Coventry Building Society – 2.95%
It’s a decent rate with Coventry, but it’s variable so could change. There’s a minimum deposit of £1.
You can apply in branch, or send an application form in via the post. You can get the form online or request it over the phone.
Other ways to save for kids
Premium Bonds
You can also buy Premium Bonds for children. These cost £1 each, but there’s a minimum purchase of £25. Grandparents are able to buy Premium Bonds, as well as parents and guardians.
The current prize fund is 1%, which isn’t the same as 1% interest. It’s very likely with small amounts of cash in Premium bonds that you won’t win anything – but there’s the chance of getting up to £1million every month.
Pensions
Yep, you can start putting money into a person pension for a child at any age. They won’t be able to access the cash until they reach 55 years old, but can manage where the money is invested from the age of 18.
As with adults adding to pensions, they’ll get 20% tax relief from the government, meaning for every £80 that’s added, £100 will be invested.
There is an annual limit though of £2,880 where you’ll get this extra top up.
Piggy banks
It can be good to get young kids familiar with coins and money by giving them a piggy bank to save with. Obviously they won’t earn any interest (unless you want to work that out yourself).
Once they get a little older to understand branch and online banking it might make sense to replace the piggy bank with the accounts above.
Apps
You can also pay a monthly fee for apps like Go Henry and Starling which help kids learn about money and spending while also giving the parent extra controls over purchases.
Tax and children’s savings
Children can earn a total of £18,500 from savings and other income each financial year. That’s the £12,500 personal tax allowance, the £5,000 starting savings allowance and the £1,000 personal savings allowance.
But parents (and parents only) are adding money to any of the non-tax free accounts then there’s a £100 interest limit each year per parent.
So say the child has £3,000 saved earning 3%, they’d make £90 in interest. That’s fine. But if they amassed £4,000 in contributions from the same parent the amount earned would be £120.
Then the entire £120 would be subject to tax at the rate the parent pays, which could be 20% or 40%. However, the parent still has their own personal savings allowance so it could be this is covered within that.
To avoid this you might want to save into a Junior ISA.
