The Best Savings Account For Your Child

What are the best-paying children’s savings accounts?
The big winner is the branch-only Regular Saver, which pays 6% AER fixed for a year, though you can only pay in between £10 and £100 per month. Of course, this is only a small amount, and you have to drip feed cash in, but the rate is untouchable.

If you want to save more, then Smart Limited Access account pays 3% AER variable on savings between £1 and £50,000, though it only allows you to withdraw cash once a year. For easy access,’s My Savings account also pays 3% AER, but you can only save up to £3,000. Don’t just do it for kids though, do it with them. Get them to monitor the rates in case they drop and if it does teach them how to check to find a better deal. That’s a real gift. For a full round up, see

Who can open these?
Generally, children need to be at least seven before they can open and manage accounts on their own. Though for HSBC under 16s will need a parent with them. For younger children, an adult needs to open the account on the child’s behalf and be a trustee or signatory (usually a parent though in some cases grandparents). Children don’t usually need to be present, but you’ll need ID for them, such as a passport. Your name will then be on the account with the child’s, but it’ll be your signature that controls it, not theirs. Grandparents can do this with the Halifax and Nationwide accounts.

What about Junior ISAs and Child Trust Funds – are they worth it?
These are special tax-free savings accounts you can put up to £4,080 in per tax year, locked away until your child’s 18th birthday. If children are roughly aged five to 13 then they would’ve got a Child Trust Fund (CTF) and the state may have given up to £500 to start it off. Any younger or older kids are eligible for a Junior ISA (JISA). Both allow you to choose between a cash savings product and an investment product. If you’ve got a cash JISA or CTF don’t think you’re locked in with a provider. You can transfer it to a new provider – just open it and fill out their transfer forms. The best-paying JISAs for savings come from and, which both pay 3.25% AER variable. The best-paying CTF is from at 3% AER. Thankfully, since 6 April 2015 you’ve been allowed to convert savings CTFs into JISAs, and, as the rates are higher it’s a no brainer – just apply for a JISA then fill in the transfer forms.

Surely kids don’t pay tax anyway?
That’s a myth. Children pay tax just like adults, and like adults, they can currently earn up to £10,600 a year from income including savings interest without any tax being taken. So unless they are a young violin virtuoso or app-building whizz kid, it’s unlikely they’d earn that, so their savings interest is tax free. Fill out an HMRC R85 form to ensure it’s paid that way – you can get one at Yet there’s a specific rule for money given to a child by parents (not grandparents, aunts, uncles) to prevent them stashing their savings in their kid’s name to avoid tax. It says if they earn over £100 interest a year (so that’s about £3,300 saved in the top easy-access account) from money given by each parent the whole amount is counted as the parents income and taxed at their rate.

So is there any point in a Junior ISA?
For most people, no. The supposed big sell is that the interest isn’t taxed. Yet this isn’t an issue for most under–18s, so if normal kids savings pay more, which they often do, use those. There are three main exceptions to this.
● You want the cash to be locked away until your child is 18.

● You’re going to give your child enough money that they go over the £100-a-year interest threshold. If so, a Junior ISA means it avoids being taxed at your rate.

● They’ll save enough cash over the years that they’d have more than the £15,240 adult cash ISA limit when they hit 18 (or whatever it is by then). If they save more than that into kids’ saving accounts and then want to shift it into a tax–free ISA once they start earning, they would use up their full £15,000 allowance immediately. Yet Junior ISAs and CTFs automatically convert into an adult ISA, meaning you still keep your adult ISA allowance on top.
It’s worth noting there’s also the children’s bond which lets you put £3,000 in, and pays 2.5% over 5 years – while it’s not a Junior ISA it’s also tax free in the same way.

What about if you want a cash card for older children?
The Young Saver account comes with a cash card for children over seven, and pays a still decent 2.25% rate compared with the accounts above. This means they can take money out of an ATM.
If you want an account with a debit card, so they can spend online or in shops from it, they can usually do this from age 11. The best-paying accounts that do so are’s 123 Mini account paying 3% AER on £300 – £2,000 and’s Flex One account paying 1% AER on the first £1,000.