Our Pick Of The Best Children’s Savings Accounts

Contributor, Editor

Updated: Oct 4, 2024, 12:08pm

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Putting money away for your child can provide them with welcome funds for later in life. The cash could pay for university, a deposit on their first home – or anything in between.

Opening a savings account is also a great way of teaching children about money and encouraging good savings habits.

Guides To Banking & Savings

Our top pick of children’s savings accounts

Children’s accounts with best returns are far from ‘one-size-fits-all’. Terms vary too, from minimum deposit amounts and ages, to access and how the accounts can be opened and managed.

We’ve pulled together the five top-paying children’s accounts below. Just bear in mind that savings rates are changing all the time. Always check for the best deal when it’s time to apply.

Saffron Building Society Children’s Regular Saver

AER (gross)*

5.55%

(variable)

Minimum opening balance

£5

Opened/ Managed

Branch, post/Branch, post

AER (gross)*

5.55%

(variable)

Minimum opening balance

£5

Opened/ Managed

Branch, post/Branch, post

Why We Picked It

If you’re looking to help your child build a good monthly savings habit, this regular saver account from Saffron Building Society could be an option worth considering.

It pays a competitive 5.55% AER (variable), and allows savers to deposit up to £100 per month throughout its 12 month term. Multiple deposits are permitted so long as their total doesn’t exceed the £100 monthly limit.

There’s no obligation to make a deposit each month, but any unused subscriptions can’t be rolled over into subsequent months.

Unlike some regular saver accounts, deposits are permitted at any time without notice or penalty.

Interest on the account is calculated daily, and paid at the end of the 12 month term and, if it happens during the term, on the child’s 16th birthday.

Pros & Cons

Leading AER
Open from £5
Withdraw cash any time
Option to skip monthly deposits

Save a maximum of £100 per month
No online banking option

Halifax Kids’ Monthly Saver

AER (gross)*

5.50%

Minimum opening balance

£10

Opened/ Managed

Online, branch/Online, branch, app, phone

AER (gross)*

5.50%

Minimum opening balance

£10

Opened/ Managed

Online, branch/Online, branch, app, phone

Why We Picked It

The Halifax Kids’ Monthly Saver pays 5.50% AER, fixed for a year, when you deposit between £10 and £100 each month.

It can be opened online or in a branch by a parent or guardian on behalf of any child aged 15 or under. Children aged 16 and 17 are not eligible.

There’s no obligation to deposit the same amount every month, and savers can make multiple deposits provided they don’t exceed the £100 limit. The account does not allow you to skip a monthly payment.

This account does not allow withdrawals part-way through the term. If savers wish to access their balance before it matures they must close it altogether, which means missing out on any interest accrued so far.

Interest is calculated daily and paid at maturity.

If the account is maintained for the full 12 months, the final balance plus interest is moved to an easy access Kids’ Saver account, currently paying 3.40% AER (variable).

Pros & Cons

Competitive AER
Open online
Fixed rate offers predictability

No withdrawals until account matures
Child must be aged 15 or under to qualify
Higher rates available for regular savers

Coventry Building Society Young Saver

AER (gross)*

5.00%

(variable)

Minimum opening balance

£1

Opened/ Managed

Branch/Branch, phone, online

AER (gross)*

5.00%

(variable)

Minimum opening balance

£1

Opened/ Managed

Branch/Branch, phone, online

Why We Picked It

Coventry Building Society is currently paying 5.00% AER (variable) on balances from £1 to £5,000.

Savers can deposit up to £200 each month, and withdrawals are permitted at any time without notice or penalty.

The account must be opened in a branch, and can be managed in person, over the phone, or – if the account holder is aged 16 to 17 – online. Children under 16 will need a parent or guardian with them to open the account.

Interest on the Young Saver account is calculated daily and added to the balance monthly.

Pros & Cons

Competitive AER
Open from £1
Access cash any time

Monthly deposit limit
Low maximum account balance
Higher rates available

HSBC MySavings

AER (gross)*

5.00%

Minimum opening balance

£10

Opened/ Managed

Branch, online/Branch, online, phone

AER (gross)*

5.00%

Minimum opening balance

£10

Opened/ Managed

Branch, online/Branch, online, phone

Why We Picked It

HSBC’s MySavings account offers a competitive 5.00% AER (variable) on balances from £10.

While there’s no maximum balance for this account, bear in mind that any portion of the balance above £3,000 earns a reduced interest rate of 2.25% AER (variable).

As an easy access account, withdrawals can be made any time without notice or penalty. All savers can manage the account in person, but only account holders aged 11 and over can access online and mobile banking services, or withdraw more than £50 without a parent’s signature.

The account must be opened in person, unless the child’s parent or guardian is an HSBC customer. In this case, it can also be opened online.

Children aged seven to 17 are eligible, and those aged 16 or over can open the account without a parent or guardian present.

At age 11, young savers have the option to open a linked MyAccount current account, which includes a visa debit card.

Interest on the account is calculated daily and paid annually.

Pros & Cons

Competitive AER
Access cash any time
Linked children’s current account
No maximum balance

Balances over £3,000 earn a lower interest rate
Higher rates available

The Family Building Society Junior Saver 2

AER (gross)*

4.50%

Minimum opening balance

£1

Opened/ Managed

Branch, post/Branch, post

AER (gross)*

4.50%

Minimum opening balance

£1

Opened/ Managed

Branch, post/Branch, post

Why We Picked It

The Junior Saver account can be opened from £1, either in a branch or via post. There’s currently no online, app or telephone banking option. Children aged eight and over can open and operate the account in their own name, while younger children need a parent or guardian to open it on their behalf.

Savers can deposit up to £25,000 – all of which is protected by the Financial Services Compensation Scheme (FSCS).

Cash held in the account can be accessed at any time without notice or penalty, and the minimum withdrawal amount is £10.

However, account holders can only make 12 withdrawals per calendar year.

Interest on this account is calculated daily and paid annually on 31 January.

Pros & Cons

Open from £1
Access cash any time

No online or telephone banking option
Only 12 withdrawals permitted per year

*AER refers to Annual Equivalent Rate which includes interest as well as any bonus or charges. An AER makes it easier to compare savings accounts on like-for-like basis.

What’s our methodology?

We’ve ordered the childrens’ accounts based on gross AER (Annual Equivalent Rate). The AER incorporates interest and any bonuses on the savings account across a 12-month period, as well as any potential charges.

While the accounts are correct at the date of publication, rates can change frequently.

We’ve also included other factors such as access to cash, minimum age to open the account, as well as any perks.

We used independent websites Savings Champion for the best deals, cross-referencing them against providers.

How do children's savings accounts work?

Children’s savings accounts are available from a range of banks and building societies and work in a similar way to adult savings accounts. There’s a few differences though which we’ve set out in our FAQs, below.

Children’s savings accounts usually run up to the age of 16 or 18 and can be opened with as little as £1. Depending on the provider, they can be managed online, in branch, over the phone or via the provider’s app.

What are the different kinds of children’s savings accounts?

There are a number of children’s accounts available with the right one often depending on whether the account holder will be able to access their money, or whether it’s locked away:

Easy access children’s savings accounts lets savers pay in cash and withdraw it at any time without notice.
Notice accounts allows access to funds, so long as sufficient notice is given – this is typically around three months. Interest rates tend to be higher than for easy access accounts.
Regular savings accounts require a regular amount to be paid in each month, with funds typically locked away for 12 months.
Fixed rate bonds require money to be tied up for a term of between one and five years. Money cannot usually be accessed during that time without paying a penalty. In return, better interest rates are usually offered. Generally, the longer the term, the higher the rate.
Junior ISAs work in a similar way to adult ISAs, but savers can only pay in up to £9,000 in the current 2024/2025 tax year (compared to £20,000 for adult ISAs). The annual allowance can be paid into either a Junior cash ISA or a Junior stocks and shares ISA, or split between the two. Funds cannot be accessed until the child turns 18.

Children born between 1 September 2002 and January 2011 will have had a Child Trust Fund (CTF) automatically opened for them by the government.

Interest rates on CTFs tend to be lower compared to those on Junior ISAs, so parents may want to think about converting from a Child Trust Fund to a Junior ISA.

Frequently Asked Questions (FAQs)

Are children’s savings accounts taxed?

Children are taxed in the same way as adults. This means they can earn a total of £17,570 before paying tax (provided they have no earned income) in the 2024/25 tax year.

This is made up of the £12,570 personal allowance and the £5,000 starting savings allowance (of which £1,000 personal savings allowance forms part of).

This means that, in most cases, children won’t have to pay tax on their savings.

However, if money gifted by a parent earns more than £100 in interest per year in a non-ISA savings account, the full amount of interest (not just the £100) will be taxed as if it were the adult’s and not the child’s.

This won’t apply to gifts from other family members and it won’t apply to money saved in a Junior ISA as this is completely tax-free.

Who can open children’s savings accounts?

Parents, legal guardians, and sometimes grandparents can open a children’s savings account on a child’s behalf.

The account will usually need to be held in trust until the child reaches the age of seven, at which point the child can start managing their own account if desired.

Children aged seven and over can usually open their own savings account, depending on the provider, but they may need their parent or guardian’s consent. The exception here is Junior ISAs as children must be aged 16 before they can open their own account.

Generally, anyone can pay into a children’s savings account, including friends and other family members.

How do savers get the best interest rate?

To find the best interest rate, savers need to consider which type of savings account best suits their requirements and then run an online comparison to see which account pays the best rate.

Interest rates on children’s savings accounts are expressed as an Annual Equivalent Rate (AER) and tend to be higher compared to rates on adult savings accounts.

Children’s easy access and notice savings accounts usually pay lower interest rates compared to fixed rate accounts, and rates are usually variable so can go up or down at any point. Interest rates on Junior cash ISAs are usually variable too.

Fixed rate accounts pay fixed interest rates for the term of the account. This has the advantage that the savings rate won’t suddenly drop. But on the flipside, should external interest rates rise, the money is locked away in an account that is no longer competitive. For this reason, some savers may prefer to stick to a shorter-term account.

Can one account be used for two children?

No, children’s savings accounts work in a similar way to adult savings accounts which means the account belongs to the individual child. Parents who want to save for more than one child will need to open separate accounts for each of them.

Can savers open more than one account for each child?

Yes, there’s nothing to stop savers from opening a number of different accounts for different purposes, so long as they can keep track of them all. For example, it might make sense to open both a fixed rate and easy access account.

What’s the minimum payment into a children’s savings account?

This will depend on the account, but many easy access children’s savings accounts can be opened with as little as £1. Regular saver accounts will usually require a minimum payment of around £5 to £10 a month, while fixed rate savings accounts may ask for a deposit of up to £500.

Keep in mind that many fixed rate children’s accounts will only allow one initial deposit – further funds cannot be added at a later date.

Can anyone but the child's parent access their account?

Potentially, yes. Even though money held in a child’s account belongs to the child, if the account permits withdrawals, it is possible for an ex-partner to access the cash if they have the necessary details. In this instance, the child’s parent can ask the bank or building society to put a temporary freeze on the account. It can also be worth seeking professional advice for further guidance.

Are children’s savings accounts safe?

Yes. Cash saved into an authorised UK bank or building society is protected by the Financial Services Compensation Scheme (FSCS). This means that up to £85,000 per person, per institution, is protected in the event the provider ceases trading.

Note that providers that are part of a larger banking group can share a FSCS licence with other brands in the group, so savers will only get one lot of protection.

For example, if an individual holds £50,000 with HSBC and £40,000 with First Direct (part of HSBC), only the first £85,000 of the cash would be protected.

At what age can a child open and manage a children’s savings account?

Children typically need to be aged seven or over to be able to open a children’s savings account in their own name. However, this can vary depending on the provider, so check first.

If they are under the age of seven, the account will usually need to be opened and managed by a parent, guardian or grandparent on their behalf.

Usually, once the child turns 16 or 18, the account is converted into an adult savings account.

Junior ISAs work a little differently. The child can take control of their account from the age of 16, but they won’t be able to access their funds until they turn 18. At this point, the account will become a standard cash ISA.

How is a children's savings account opened?

A children’s savings account can be opened on behalf of the child by an individual aged 18 or over and a UK resident. They will usually need to be the child’s parent, legal guardian or grandparent.

Accounts can often be opened online, although savers may need to go into their local branch to provide ID and address verification. Usually, the child’s birth certificate or passport, as well as their parent or guardian’s own ID needs to be provided.

Most banks and building societies also request proof of address such as a recent bank statement or utility bill.

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Rachel Wait Contributor

I've been writing about personal finance issues for many years across a wide range of websites, magazines and newspapers. My role is to demystify financial products, explain people's options and help them make the most of their money.

Bethany Garner Editor

I’ve been writing for a broad array of online publications for four years, always aiming to make important insights accessible. It’s my goal to ensure that as many people as possible can make informed decisions about their money, and get the most out of their finances with the least amount of stress.