The best Children’s savings accounts

The highest paying easy-access and regular children’s savings accounts and Junior ISAs.

Here’s my guide to the best children’s savings accounts. Check the date to see when this was last updated.

Easy access accounts

These can be current accounts for kids or specific children’s 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 once they reach a certain age.

  • HSBC MySavings (5% AER variable on up to £3,000 saved / 2.25% above this)
    • Min £10
    • Ages 7 to 17
    • Debit card from 11
    • Can be opened online if parent/guardian has HSBC account, otherwise in branch only
  • Nationwide FlexOne Saver (5% AER variable on up to £5,000 saved)
    • For 11-17-year-olds
    • Requires a FlexOne current account
    • Can get a Visa debit or a cash card
  • Kent Reliance Demelza children’s savings account (4.3% AER variable)
    • Min £10 / max £25,000
    • Under 18 years old only
    • No debit card
    • 0.25% of the average balance of all Demelza accounts given to Demelza Children’s Hospice each year
    • Open it in branch or via post
  • Santander 123 Mini account (up to 3% AER variable)
    • 1% on balances up to £999.99
    • 2% on the total balance if it’s between £1000 and £1,499
    • 3% on the total balance if it’s between £1,500 and £2,000
    • Under 18s only
    • Debit card for kids 13 and over
    • Open in branch only for under 13s, online or branch for over 13s

Regular Savers

These children’s savings 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 time months is up, the account will close and the money will be transferred to a linked savings account.

  • Halifax Kids Monthly Saver (5.5% AER fixed for 12 months)
    • min £0 / max £100 a month
    • Open to children aged 17 or under
    • Can be opened online or in branch

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.

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.

We’ve only listed cash ISAs here.

You can open via the post or in branch

You can open online

  • NS&I (4% AER variable): min £1 (open online)
  • Tesco Bank (4% AER variable): min £1 (open via online/phone)

Tax and children’s savings

Andy’s analysis

When choosing a children’s savings account, you probably won’t need to worry about tax on interest.

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.

However, if 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 £2,000 saved earning 3.75%, they’d make £75 in interest. That’s fine. If they amassed £3,000 in contributions from the same parent the amount earned would be £112.50.

That’s still ok if the money comes from both parents, as the allowances would be combined and the total interest that can be earned would be £200.

But if it’s from one parent, then the entire £112.50 would need to come out of that parent’s Personal Savings Allowance. That might not be a problem – but if it exceeds this, then the whole amount will be subject to tax at the rate the parent pays, which could be 20% or 40%.

To avoid this you might want to save into a Junior ISA.

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 4.4%, which isn’t the same as 4.4% interest. It’s very likely that with small amounts of cash in Premium bonds you won’t win anything – but there’s the chance of getting up to £1 million 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 57 years old (though that will likely increase when they’re older). However, they 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

Starling offers a free app to help kids learn about money and spending while also giving the parents extra control over purchases called Starling Kite. You can also pay a monthly fee for apps like Go Henry and HyperJar. However, you’re unlikely to get any decent rate of interest from any of these.

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