Bank accounts for kids: a complete guide to the best ones to start them saving

We explain your options and the top bank accounts for kids to choose

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When it comes to bank accounts for kids, it’s never too early to start saving for their future – the sooner you put money away the more time there is for it to earn interest and build up. And with children likely to need all kinds of things when they get older, from money for university to a deposit for a property, they need all the financial help they can get.

Although you can save for your children in your own accounts, which means you’ll always have control of the money, there are a number of benefits to taking out dedicated children’s ones.

Interest rates tend to be higher than for adult accounts, which often don’t beat inflation, you can benefit from the tax-free allowance you get with Junior Isas and you can keep the money separate and often locked up so you’re not tempted to spend it. You also won’t use up your own tax-free allowances.

As a parent you’ll usually manage your child’s account on their behalf if they’re under a certain age, which means you can take money out for them if the account lets you make withdrawals, but anyone can pay money into it if they want to contribute.

You broadly have two strategies open to you – either you lock your child’s money away until they’re 18, when they’ll get a nice nest egg, or you take out an account that gives your child more control over their savings so they can save up for specific things and learn to manage their finances themselves. You may decide to use a combination of both.

(MORE: Teaching children about money: the dos and don'ts)

Types of bank accounts for kids

There are four main categories of account. The ones that are right for you depend on your reasons for saving and whether you want to be able to access the money: 

Junior Isas

These are long-term savings accounts that currently let you save up to £9,000 a year tax-free. Although children don’t usually have to pay tax on savings interest, if they earn more than £100 a year from money given to them by a parent, the parent may have to pay tax on it. This doesn’t apply to money in a Junior Isa. 

You take them out on your child’s behalf. They can manage the account themselves when they’re 16 but can’t take the money out until they’re 18.

As with adult Isas, Junior Isas can either be cash or stocks and shares Isas and your child can hold one or both types. Returns can be higher with a stocks and shares Isa but their value can go down as well as up.

Children’s instant-access and notice accounts 

These either let you take the money out whenever you like or after a notice period, such as 100 days. Your child can manage the account themselves when they get to a certain age. The higher-paying accounts often pay lower or no interest above a certain balance though. 

Children’s regular savings accounts 

These are designed to be paid into every month up to a set limit but the amounts you can save into them are relatively small. Most lock your money away for a year but instant-access accounts are available too.

Children’s fixed-rate bonds 

You get a fixed interest rate for a fixed period, which is usually between one and five years. You can’t take the money out until the end of the term.

You can also take out long-term children’s savings accounts with variable interest rates that lock the money up until they reach a certain age.

There’s usually no minimum age for children’s accounts although there are exceptions, such as HSBC’s MySavings (see below). Junior Isas are available to children up to age 17, for instant access, notice and fixed-rate accounts it can be anything up to 20 and for regular savings it’s often 15.

Top bank accounts for kids picks

Best Junior cash Isas (investing £3,000) 

Loughborough Building Society

Loughborough Building Society – Junior Isa 

Interest rate 2.5% AER (variable) | Minimum opening balance £1 | No withdrawals until age 18 | Interest paid yearly |Maximum age 17

You can only apply for and operate this account via a Loughborough BS branch or by post. If your child is under 16, you must open the account on their behalf but they can take it over themselves once they reach 16. Although the Loughborough is a local building society, anyone in the UK can take out the account.

Dudley Building Society

Dudley Building Society – Cash Junior Isa

Interest rate 2.5% AER on balances of £2,500+, 1.4% below (variable) | Minimum opening balance £100, maximum balance £500,000 | No withdrawals until age 18 | Interest paid yearly | Maximum age 17

This account only competes with Loughborough’s Junior Isa once the balance reaches £2,500, when the rate jumps from 1.4% to 2.5%. As with all Junior Isas, you have to open the account on behalf of your child if they are under 16. You can only open and operate it in a branch or by post but can also use email and phone to ask any questions about your account.

Best instant access children’s savings accounts (investing £1,500) 

Santander

Santander – 123 Mini Account

Interest rate 3% AER on balances of £1,500 to £2,000, 0% above (variable) | Minimum opening balance £0 | Instant access | Interest paid monthly | Maximum age 17

This account is technically a current account but pays a great interest rate of 3% once the balance reaches £1,500. It’s 1% below £1,000 and 2% from £1,000 to £1,499.99. No interest is paid at all above £2,000 though. You can hand the account over to your child to manage when they’re 11. Once they manage it themselves they can get a cash or debit card. It can be operated via online and mobile banking.

HSBC

HSBC -  MySavings

Interest rate 2.5% AER on balances of £10 to £3,000, 0.25% above (variable) | Minimum opening balance £10 | Instant access | Interest paid monthly | Minimum age 7, maximum age 17

This account is only available to children aged seven or above. They can withdraw money using their cash book but if they’re under 11 they’ll need your permission if it’s more than £50. Children aged 7 to 10 get a free money box and sticker activity book. On their 11th birthday HSBC will also open a current account for them including a debit card. MySavings can be managed online and via mobile banking. 

Best regular savings bond (investing from £10) 

Dudley Building Society

Dudley Building Society – Junior Easy Saver

Interest rate 3.5% AER on balances of £10+ (variable), 12-month bond | Minimum opening balance £10, maximum balance £1,800 | Maximum deposit £150 a month | Interest paid on anniversary | Maximum age 15

This account offers an excellent interest rate but your child’s money will be locked up for a year as no withdrawals are allowed. You’ll need to open it on their behalf if they’re under 11 and it can only be opened and operated in a branch or by post. You can pay in up to £150 a month. Barclays Bank and Halifax also have 12-month bonds paying 3.5% but the maximum investment allowed is £1,200.

Account selection based on data from Moneyfacts.co.uk on 29 June 2021. AER means annual equivalent rate and is the interest you would earn over a year. You should use this to compare accounts.