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Top children's savings accounts

Teach your kids to save at up to 5.8% interest

Gavin Shepherd
Gavin Shepherd
Updated 16 August 2023

Some children's savings accounts offer comparable or even better rates than adult accounts. But many kids have cash in accounts that pay next to nothing in interest, depriving them not only of the cash that generates, but also of the lesson that you can make your money work for you. We've top pick accounts for kids below...

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In this guide

Top-pick kids' savings

We've a couple of guides to help you save in the best place for your child, so before you read on, check you're in the right place...

'Normal' kids' savings


This guide is the right place to find out about children's savings and top rates. Most of these give you instant access to your money.

Top junior ISAs

These let you save or invest up to £9,000 each  tax year, with the cash locked away until the child turns 18. 

Tips on teaching kids to save and other need-to-knows

The simple money lesson for younger children is obvious – put your cash in the bank and it'll grow. But as they get older there's another lesson to be learned – a bank's job is to make money from you, our job is to try to keep our cash.

So here are some top tips for helping kids learn and understand about saving, plus everything else you need to know about kids' savings.

  • 1. When choosing an account, explain the difference between real banks and piggybanks to your kids

    Here's a handy explanation you can use with your kids: "Put your cash in a piggybank and it sits there. But put it in a real bank and you're actually lending them your money – so they need to pay you for it.

    "The amount you're paid is called interest. The higher the interest and the longer you keep your savings with them, the more they pay you. If the interest is 10%, that means they pay you 10p a year for every £1 you save with them."

  • 2. Pick the account together, but get your child to monitor the rate and let you know if it drops

    Look through the best buys together, explaining accounts' pros and cons (if you're unsure, see Interest rates for beginners) and make the decision together. Better still, go to your local bank or building society, get your child to ask for an account there and compare its deal with the best here.

    Plus, don't let them be swayed by cute toy freebies – explain that many banks try to tempt you in, but often they're the ones that don't pay good interest. So pick an account for interest, then discuss opening other accounts, paying in just the minimum amount required to grab the freebies.

    If you go for an easy-access or variable-rate deal, put your child in charge of checking the interest every month to see if it's still paying a decent rate. Move it if not.

  • 3. Explain to your child how putting savings in a bank makes sure their savings are protected

    It's an interesting discussion to have with children. There's a balance here: a piggybank is kept at home where you can see it, but it can be stolen (don't say that if it'll scare them). Yet money in the bank is safe and earns interest, though there's a slight risk the bank may collapse.

    If it does, provided it's a UK-regulated account (all those listed below are) the money is protected up to £85,000 per person by the Government, which is as safe as we can hope for. See our Safe savings guide for more.

  • 4. And agree with them how much of their pocket money they'll save (and how much is available to spend)

    One easy trick is to defer an element of pocket money to show the extra reward from saving. For example, if their pocket money is £3, give them half for spending and half for saving. Then tell them for every pound they save, you'll give them an extra one at the end of the year as a reward (if you can afford it, of course).

    For more tips, see Martin's blog: Give pocket money as pay.

  • 5. Children's savings can be taxed, but most kids (and adults) don't earn enough interest for this to happen

    There's a common myth that children don't pay tax. But they're actually taxed in exactly the same way as adults.

    However, most children don't have jobs or earned income. And for the 2023/24 tax year, if they've no income they can earn up to £18,570 in savings interest without paying tax on it. (That's the £12,570 personal allowance + £5,000 starting savings allowance + the £1,000 personal savings allowance.)

    Even if your child does have income to pay tax on, the personal savings allowance means basic-rate taxpayers can earn £1,000 of savings interest tax-free.

    Yet there is one fly in the ointment...

    If money is given by a parent or step-parent (not grandparents or others) and the interest earned on it is over £100/year from non-ISA savings, the whole thing is taxed like it's the parent's cash.

    The £100 allowance is on a 'per parent' basis, rather than a 'per child' basis. The aim is to stop parents using their kids' tax-free allowance for an extra allowance.

    The parents' personal savings allowances are also taken into account.

    Once the child earns more than £100 per parent, the whole lot is taxed at the parent's income tax rate. But even then, if the parent is within their personal savings allowance and the child's savings don't take them over, it'd still be tax-free.

    However, if the child goes over the £100 limit and the parent is over the personal savings allowance, their savings would be taxable. In this case, saving into a junior ISA would be a tax benefit, as then it's tax-free.

  • 6. Consider a junior ISA if you want to lock the money away or your kid's a high earner

    Whether you should get a junior cash ISA depends on two things – if your kids pay tax now (almost all don't), and if you want to lock the cash away, or retain more control over it.

    If your kids don't pay income tax (child prodigies watch out!) then they'll be able to earn £18,570 in savings interest before having to pay tax on it, meaning that a tax-free junior ISA isn't really necessary.

    But if they'll have high levels of savings once they turn 18, a junior ISA could be a good plan, as these convert to full cash ISAs when the child turns 18, meaning they remain permanently tax-free.

    Junior ISAs lock cash away until the child turns 18 – at which point it's their money. With the accounts in this guide, most allow access at any time, giving you more control.

    See our Junior cash ISA guide for more info on whether they're right for you and the best-buy accounts (and our Child Trust Fund guide if your child was born between 1 September 2002 and 2 January 2011).

  • 7. You can save in your child's name – but be aware of the tax implications

    "Using your children tax-efficiently" sounds slightly callous. But if you are better off, so are your kids. Saving money in a child's name means you often save at a higher rate of interest. It's perfectly possible to have one account for your child to put their pocket money into, and another for any larger amounts.

    But the personal savings allowance (PSA) has made this less of an issue. This is because, as we've said above, it allows basic-rate taxpayers to earn £1,000 in interest each year without paying tax on it (£500 for higher-rate payers, nothing for additional-raters). Though it's still worth considering if you're close to maxing out your PSA.

    The tax implications

    If it's their own money, children can earn the same £18,570 a year in interest as adults before it gets taxed. However, don't assume you can dunk fortunes in your kid's name.

    As we've explained, if a child generates more than £100 in interest over the course of a year, from money specifically given by each parent (or step-parent) (so £200 for a couple with a child), this income falls under that parent's PSA. And if they've used their allowance up, it'll be taxed at their rate.

    One way around this is with a junior ISA, where you can save £9,000 in your child's name, which is free of tax regardless – read our full Junior ISA guide.

    Also, these rules only apply to parents, not grandparents, aunties, uncles or friends. They may all give your children as much as they like and, providing it's a genuine gift, it counts as the child's money without a £100 limit.

    The only other tax implications of making cash gifts is the possible spectre of inheritance tax if the donor dies within seven years of making it.

    A warning for bright sparks thinking: "If I gave my brother's kids £20,000 and he gave mine the same...?" Good thought, but no cigar. If HM Revenue & Customs spots you, you're in trouble.

    Understand whose money it is

    It's worth remembering if the money's in your child's name, it's your child's money. Yet if you're worried that by putting £1,000 in their name they'll splash out on 100 mobile apps, a Nintendo Switch and enough sweets to give a junior school a sugar rush, don't be. Many accounts will allow the adult to stay in control of the cash until the child turns 16. When they do, the cash is technically theirs to do with what they wish.

    Most banks require a child to be at least seven before they can open an account for themselves, though they do all differ, so it's worth checking the specifics. Under-sevens require a parent, guardian or grandparent to set up an account and act as signatory.

    This method can also be selected for older children. If it is, then usually until the child is 16 the signatory can still manage and withdraw the cash without the child's approval. Many accounts have terms and conditions stating withdrawn money must be used "for the benefit of the child", but of course, this covers a wide variety of definitions.

Rather watch than read? Martin Lewis explains children's savings accounts

The clip below lasts four minutes and 19 seconds and has been taken from The Martin Lewis Money Show, broadcast on 17 December 2020, courtesy of ITV Studios Ltd, all rights reserved. You can turn on subtitles by selecting the closed captions icon at the bottom right of the video.

Just bear in mind that the savings rates mentioned are subject to change – check the tables below for the most up-to-date rates.

Martin Lewis explains which are the best children's savings accounts.
Embedded YouTube Video

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Top children's easy-access accounts

With easy-access savings accounts, you can add and withdraw money at will. We've picked accounts that let your kids save a decent lump sum in them.

MSE analysis.

Kids' easy-access accounts – what we'd go for

Easy-access accounts are best for saving bigger sums – though the best rates here are mainly on kids' current accounts.

The top interest rate on one of these is 5% from HSBC, although this rate applies only to balances of up to £3,000. It can be opened online if the parent/guardian of the account holder is an HSBC customer, otherwise you must go into a branch.

For an account anyone can open online, Halifax pays 3.4% on up to £5,000.

Account and interest rate (AER variable) Gives debit card? Min/max age and how to open

HSBC MySavings

 

5% on £10 to £3,000
2.25% above £3,000

Yes

More info

 7-17: Apply in branch or can open online if parent/guardian has an HSBC current account
Yorkshire BS One Day

4.55% on £10 to £1m		 No 0-21: Apply in branch or by post

Earl Shilton BS Foundation Account

 

4.45% on £250 to £10,000

(max three withdrawals a year)

 No 0-17: Apply in branch or by post
Kent Reliance Demelza

4.3% on £10 to £25,000		 No 0-17: Apply in branch or by post

Leeds BS Ronnie the Rhino Youngsaver

 

4.25% on £10 to £1m

 No 0-17: Apply in branch or by post
Top online accounts. Lower rates than above, but all can open online. 

Halifax Kids' Saver

 

3.4% on £1 to £5,000
1.45% above £5,000

Withdrawals can only be made in branch. (1)

 No 0-15: Apply online or in branch. Up to two accounts per child permitted.

Santander 123 Mini*

1% if you've £1 to £999.99

2% if you've £1,000 to £1,499.99

3% if you've £1,500 to £2,000

0% above £2,000

Yes

More info

 13-17: Must apply online

(1) Parents with a Halifax current account can use online banking to transfer between the child's account and theirs, which then makes withdrawals from the parent's account possible at an ATM.

Want to know how much you'll earn in easy-access savings? Find out with our Savings Calculator. Simply plug in the rate, how much you'll save and how long for and it'll tell you how much you'll earn.

Top kids' regular savings accounts

These accounts let you save small amounts each month, usually for a fixed term of a year. They often pay high rates of interest, but tend to have withdrawal restrictions. For a more detailed explanation of how the interest works and the pros and cons, read our full adults' Regular savings guide. Or take a look at the top payers below.

MSE analysis.

Kids' regular savers – what we'd go for

These accounts let you save smaller amounts every month. There are a few top picks – and which is best for you depends on how you want to open the account, and whether you need access to the money.

Saffron BS pays the top rate of 5.8%, it offers unlimited withdrawals but can only be opened via post or in branch. Halifax pays only slightly lower at 5.5% and allows you to open the account online, though you can't make withdrawals. Both accounts let you deposit a maximum of £100 per month. 

Provider Interest rate (AER) Min/max monthly deposit (all accounts let you skip months with no penalty) Min/max age to open How to open Withdrawals allowed?
Saffron BS 5.8% variable £5/£100 0/17 Post/ branch Yes
Halifax 5.5% fixed for a year £10/£100 0/15 Online/ branch No, but can close early without penalty

Want to know how much you'll earn in regular savings? Find out with our Savings Calculator. Simply plug in the rate, how much you'll save and how long for and it'll tell you how much you'll earn.

Top kids' fixed-term savings account

These account offer a guaranteed rate, though you'll need to lock away your cash until the fixed-term ends – so you won't have access.   

MSE analysis.

Kids' fixed-term savings – what we'd go for

There's currently only two kids' fixed-term accounts – Saffron Building Society offers a two-year fix at 5.6%, while Cambridge Building Society offers a lower 4.5% for three years.

Both have low maximum deposit limits, meaning your interest will be limited. Yet, the rates are fixed, which is good if you're looking for certainty, as your returns are guaranteed.

Provider Interest rate (AER) Min/max deposit Min/max age to open How to open
Saffron BS 5.6% fixed for two years £500/ £25,000 0/16 Post/ branch
Cambridge BS 4.5% fixed for three years £1,000/ £20,000 0/15 Post/ branch

Want to know how much you'll earn in fixed-term savings? Find out with our Savings Calculator. Simply plug in the rate, how much you'll save and how long for and it'll tell you how much you'll earn.

Children's savings FAQ

  • Can my child control the savings account?

    This usually depends on the age of the child and how you've opened the account. Typically, if your child is under eight the account will be held in trust by the adult(s) who opened it. However, some accounts allow you to remain a signatory until your child is 16.

    Many accounts have terms and conditions stating withdrawn money must be used "for the benefit of the child", but of course, this covers a wide variety of definitions.

    Once your child is old enough, they will also be able to manage the account, either online, in branch and via ATMs – depending on the features the account offers. See our best-buy tables above to compare the best rates.  

  • Who can open children’s savings accounts?

    Until a certain age (this varies per provider), parents, guardians and often grandparents can open a children’s savings account on behalf of a child (referred to as 'in trust').

    You'll usually need permission from the child's parents to do so, which can vary from a checkbox to say you've asked to the account details being sent to them in the post. 

    Depending on the account and once the child is old enough, the account can usually be opened in their name without the signatory of an adult. 

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

    Children under eight will need a signatory to open a savings account 'in trust'. After this age, they can usually open their own savings account, though the age will vary from account to account.

  • Can one account be used for two children?

    Any money in the account will belong to the child named on the account, and most children's savings accounts can't be opened in joint names.

    So, whilst you could technically pool the money into one, it would formally belong to the one child named.

    Confusingly, however, it’s sometimes possible to open more than one account for each child with the same bank or building society.

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