Best children’s savings accounts: Today’s latest rates

A child savings account is very similar to an adult one. You can open one for children under the age of 18 with as little as £1. It is a good way to teach children financial skills as many accounts allow children over the age of seven to add and withdraw money themselves.

You can choose between an easy or instant access and a regular savings account. These work the same way as the adult version. Easy or instant-access accounts allow you to withdraw or deposit money at any time and they usually have lower interest rates. Regular savings accounts require you to save every month and the withdrawals may not be as straightforward. They generally pay higher interest but this can be reduced if you miss a monthly deposit.

In this guide, we will cover:

• How we determine the best rates
• The best children’s savings accounts
• Expert opinion: Things to consider when choosing an account for your child
• Children’s savings accounts FAQs

How we determine the best rates

The Best Buy tables show the best savings rates widely available in the market. This means certain accounts are excluded, including those that require minimum deposits of more than £25,000 or are available only to local or existing customers.

The data in these tables is provided by Savings Data Limited and is compiled using automated tracker tools and updates from savings providers. Savings Data Limited then manually checks the information and enters it into a database that feeds the live tables, which update daily.

The savings accounts shown are protected by the Financial Services Compensation Scheme. The information in this article is intended for information purposes and should not be taken as endorsement or advice.

The best children’s savings accounts

The table below highlights the best savings accounts you can open for your children.

For more ways to save for your child, check out our guide to the best Junior cash Isas.

If you’re looking for a new home for your own savings, you can find the best tax-efficient options in our guide to cash Isas, while our pick of easy access savings accounts can reveal the best options if you want to add and withdraw money whenever you like. 

Alternatively, you may be able to find higher rates if you’re willing to lock your cash away – the top rates are in our guide to the best fixed-rate bonds.

Expert opinion: Things to consider when choosing an account for your child

Caitlyn Eastell, of analyst Moneyfactscompare.co.uk, said: “There are many children’s savings accounts to choose from, ranging from easy access, regular savers or Junior Isas. They are a good option for parents wishing to save for their child’s future.”

But she reminded savers of the tax implications: “It is worth noting that children are still liable to pay tax and have the same personal allowance as adults and once the child reaches a certain age, usually 18, the account will automatically roll into an adult savings account, where they will have full control.”

Mark Hicks, of stockbroker Hargreaves Lansdown, said: “Children’s accounts are brilliant but are not advertised enough. I think the UK still has a big problem in that financial education, particularly in schools, is not on the agenda. So getting a child an account and encouraging them to save from a young age is incredibly important.”

What makes a good children’s savings account? 

• A good savings rate: This might seem obvious, but the money you save for your children will grow and compound at a much faster rate if you can make sure the interest rate is competitive. If possible, it should at least match inflation – otherwise the money will be losing value in real terms.
• Easy to manage: Consider whether you’ll need the option to make withdrawals, how you want to open and manage the account, and whether there are decent options when your child gets older – for instance, does the provider offer accounts for teenagers to help them manage their money?
• Suits your savings plans: Many children’s accounts can be opened with £1, and may have fairly low maximum deposits. However, these won’t be suitable if you have a more significant amount to save.
• Suitable for your child’s age: Watch out for minimum and maximum age requirements as this may affect when you can start saving for your child, and how long you can save for.

How to open a children’s savings account 

1. Choose an account: Weighing up the factors explained above, choose a provider and account that suits you and your child.
2. Check the small print: Just in case there are any restrictions or details that aren’t obvious, comb the terms and conditions for anything that might make you change your mind.
3. Go with your opening method of choice: Once you’re happy, go and open the account. Some providers may let you open an account online or you may have to visit a branch or do it by post. Providers may have their own rules for how old a child needs to be to open an account under their own name, and young children, often under eight, typically need a parent to sign and set one up on their behalf. You may need to provide documents such as a birth certificate for the child and your own ID.
4. Start saving: You may be able to save into your child’s account via online payments or bank transfers. If your child receives money from friends and family, such as on their birthday, you may also be able to get them involved by taking them to a branch to make a cash deposit. Be sure to take note of any deposit restrictions.

Managing your child’s account 

Some accounts may let children manage the account themselves from a certain age, depending on whether they were made a signatory when it was opened.

In some cases, even if the child can manage the account, they may need to have a parent or guardian with them when they visit the bank to request changes, or withdraw money.

Children’s accounts usually convert to an adult savings account once the child turns 18, but there is more flexibility before that and you may be able to access the funds if needed.

Be mindful of tax 

Children don’t usually have to pay tax on savings interest. This is because the amount saved and interest earned rarely exceeds the personal savings allowance (PSA) threshold.

But if a parent is contributing money into the account and it earns more than £100, this will go towards their own PSA.

If you are worried about this, another type of child savings account is the junior Isa (Jisa).

This has a separate annual £9,000 allowance to the adult Isa that can be put into a cash or stocks and shares Isa for children to access after the turn 18. All growth is tax-free – for both children and parents.

Children’s savings account vs Junior Isa

• Product choice: There are generally more children’s savings account to choose from than Junior Isas, and interest rates can be higher for savings accounts.
• Tax: Interest or investment growth in Junior Isas is tax-free, but interest earned in a children’s savings account is taxable.
• Access: No money can be withdrawn from a Junior Isa. With these accounts, the money is locked away until the child becomes an adult. At this point, the account will convert to an adult Isa, and they will get full control of it. Many children’s savings accounts will allow withdrawals, which can be a useful way to teach children about the value of money.
• Type of account: Children’s savings account just save in cash, but with a Junior Isa parents can choose to save in cash or invest with a stocks and shares option for their child.

Children’s savings accounts FAQs

Can grandparents open a children’s savings account?

Yes, grandparents can open a child savings account for their grandchildren, as long as they bring proof of identity, such as a birth certificate. You usually need permission from the parents. The cash from a grandparent won’t be taxed at the point it was given, though it could be caught by inheritance tax depending on when the gift was made.

Do parents pay tax on children’s savings accounts?

Parents and step-parents can become liable for tax on their child’s savings interest, so it’s something to keep an eye on. 

If over £100 interest or dividends is earned on the money you give a child, the interest will be taxed as if it were yours. This does not apply to Junior Isas or child trust funds.

This rule only applies to parents – friends and grandparents can give as much as they like without worrying about the interest.

As for the possibility of children paying tax on savings interest, that could also happen – but it’s much less likely. As with adults, children are liable for tax and have a personal allowance of £12,570, plus a £5,000 starting savings allowance and a £1,000 personal savings allowance, for the year 2024 to 2025. If annual income, including interest, exceeds the personal allowance, then income tax will be due.

When can kids take control of their savings?

This depends on the account and the age of the child. Generally, if your child is under eight the account is held in trust by the adult who opened it. Some accounts allow the parent to remain the signatory until your child is 16.

Many accounts let children take control of their savings from the age of seven, meaning they can deposit and withdraw money.