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

Mother and child getting money from a piggy bank

(Image credit: Getty images)

last updated 7 February 2023

When it comes to bank accounts for kids, it’s never too early to start saving for your child’s 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 are often higher than for adult accounts, 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 or guardian 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.

The main types of accounts you can save into for children are junior ISAs, easy-access accounts, or fixed rate. We explain what they are below and the best ones available right now.

Best instant access children’s savings 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.

HSBC - MySavings

Interest rate 3.5% AER on balances of £10 to £3,000, and 1% on balances more than £3,000 (variable)

Minimum opening balance £10
Instant access
Interest paid monthly
Minimum age 7, maximum age 17

This account is for children aged seven or older. 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, in branch and via telephone and mobile banking.

Kent Reliance - Demelza Account

Interest rate 3.05% on balances of £10 to £25,000 (variable)

Minimum opening balance £10
Instant access
Interest paid monthly
Minimum age 7, maximum age 12

This account is for kids aged between 7 years and 12 years. Those aged between 7 and 12 years can withdraw up to £100 per day and those 12 years and over can withdraw normally. Once the account holder turns 18 years, the operator will be removed from the account and the account holder is free to manage it.

Every year Kent Reliance will donate 0.25% of the total average annual balance that is held in Demelza accounts to the Demelza Hospice for Children.

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. Nothing is paid above £2,000. 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 online, in branch and via telephone and mobile banking.

Best Junior cash ISAs

These are long-term savings accounts that currently let you save tax-free - you can save up to £9,000 a per tax-year. 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 or guardian, then you may have to pay tax on it. This doesn’t apply to money in a Junior Isa.

A parent or guardian can open a Junior ISA - but beware, once it is opened, only the child can access the money when they are 18. 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.

Here, we have listed the best cash Junior ISAs.

Coventry Building Society – Junior Cash Isa

Interest rate 3.10% AER (variable)

Minimum opening balance £1
No withdrawals until age 18
Interest paid yearly on 30 September
Maximum age 17

You can apply for and operate this account by post or telephone. You can also pay cash and cheques in at a Coventry BS branch. 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. The account lets you transfer an existing Junior Isa into it. Note, from 1 December the variable interest rate will rise to 3.60% (tax free).

Dudley Building Society - Cash junior ISA

Interest rate 2.80% AER on balances of £2,500+, 1.70% between £100 and £2,500 (variable)

Minimum opening balance £100, maximum balance £500,000
No withdrawals until age 18
Interest paid yearly
Maximum age 17

Once the balance reaches £2,500, the rate jumps from 1.70% to 2.80%. 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 questions about your account. Transfers in from other ISAs are allowed.

Account selection based on data from Moneyfacts.co.uk on 17 June 2022. AER means annual equivalent rate and is the interest you would earn over a year. You should use this to compare accounts.

Cathy has been a journalist since 2001 and specialises in money, property and technology. Before going freelance in 2018 she worked at Which? for 12 years, first as a money writer then as an editor in the money, home, tech and cars teams. Publications she has written for as a freelancer include Loveproperty.com, Lovemoney.com, The i Paper, the London Evening Standard, Which? and Which? Computing.