Best Children's Savings

The Halifax Kids' Monthly Saver pays 4.5% AER fixed for a year, the top payer, but it doesn't allow any withdrawals during the term. If your child's going to need the cash, it's best to look for a different account.

• You can open the account online or in a Halifax branch (it can't be opened in Bank of Scotland branches). Access to the account is online, by phone or in branch.
• You're allowed to save £10-£100 each month, but if you decide to skip a month there's no penalty.
• The cash is transferred to a Halifax Young Saver account (see below) after a year.
• Halifax shares its £85,000 UK savings safety guarantee with the rest of the HBOS group including Bank of Scotland, AA, Saga and BM Savings.

If you can agree with your child to put £5 or more aside most months, the Children's Regular Saver from Saffron BS pays 4% AER, and allows withdrawals from the account. You'll need to operate the account by post unless you live near a Saffron branch.

Need-to-knows

• You can save any amount between £5 and £100 each month, though there's no penalty if you miss a pay-in.
• Children under seven must have an adult to operate the account for them.
• At the end of the 12 months, the account will turn into a Maturity Easy Access account, paying just 0.5% interest.
• Saffron BS has the full £85,000 UK savings safety guarantee.

Older children aged 11 to 17 can open Nationwide's FlexOne Regular Saver account, which pays 3.5% AER. This account's good if they can save regularly and want a decent rate, but also want the ability to operate the account online. To get this account, they'll also need the FlexOne current account as well.

Need-to-knows

• You can add from £1-£100 each month, though there's no penalty if you miss a pay-in.
• You can withdraw as often as you like, and also replace the cash the same month, provided the total pay-in minus the withdrawals is £100 or less.
• Interest on the savings account is paid annually on 31 December.
• Nationwide has the full £85,000 UK savings safety guarantee.

The Children's Regular Saver from Barclays pays 3.5%, so less than the Halifax and Saffron accounts above but it's a good option if there's no Halifax branch nearby, but you do have a Barclays (or you already bank with Barclays).

Need-to-knows

• You can save any amount between £5 and £100 each month, though there's no penalty if you miss a pay-in.
• The rate drops to 1.51% for a month if you make a withdrawal, so try to keep these to a minimum.
• The rate is fixed for 12 months – after this the account will be converted into an Instant Saver account, which probably won't pay as good a rate.
• An adult must open the account for children aged under 16.
• If you've a Barclays current account, you can access the account online or by phone on behalf of your child.
• Barclays has the full £85,000 UK savings safety guarantee.

If your child's 11 or over the Santander* 123 Mini Current Account pays a decent 3% AER if you have £300 to £2,000 in it. It's a good way to teach your kids about managing money as they'll operate the account themselves and get a debit card or cash card.

If you're a parent or guardian for a child under 11 and you have a Santander current account, you can open a slightly different account for your child called the Santander 123 Mini Account (in trust) which also pays 3%. If you want to, you can then transfer the account to a 123 Mini Account following your child's 11th birthday.

Need-to-knows

• As it's a current account, you can make unlimited withdrawals from it.
• You can open the account online, by phone or in branch.
• You only get the 3% interest if you've £300 to £2,000 in the account. If you've £200 to £299 it's 2%, and for £100 to £199 it's 1%. Rates apply to the entire balance.
• Santander has the full £85,000 UK savings safety guarantee.

The HSBC MySavings account pays a decent 2.75% AER, and is ideal if you'll need access to the money as you can make unlimited withdrawals. But you only get the top rate on the first £3,000 in the account, so if your child's a big saver, then look at the accounts below.

Need-to-knows

• If your child's 7-17 they can open the account – though under 16s need a parent/guardian with them.
• While the child is under 11, the adult trustee's permission is needed to withdraw £50 or more.
• Once the child reaches 11, they get a MyAccount, which comes with a Visa debit card.
• If your child's under 11, you need to apply and operate the account in branch or by phone. Once he or she reaches 11, as part of the MyAccount, it can be operated online.
• You get a free moneybox (some get a sticker book too) when you open the account.
• HSBC shares its £85,000 UK savings safety guarantee with First Direct.

If your child has lots of savings, Nationwide's Smart Limited Access account pays 2.5% AER on up to £50,000.

Its major drawback is that it only allows you to make one penalty-free withdrawal/year. Make any more and the rate drops, so if your child's likely to need frequent access, the other accounts in this guide may be better picks.

Need-to-knows

• You're only able to make one penalty-free withdrawal per year. Make two or more and the rate drops to 0.25%.
• You can operate the account online, but you'll need to go to a branch to open it (unless you're an existing Nationwide customer).
• Kids aged seven or older can open the account in their sole name. However, if your child's aged under 16, then a parent or guardian can open the account on their behalf.
• Nationwide has the full £85,000 UK savings safety guarantee.

If you're looking for an easy-access savings account where you don't need a current account with it, the Halifax or Bank of Scotland Kids' Saver account pays 2% AER without any bonuses, and allows unlimited withdrawals.

Need-to-knows

• The account can be opened online or in branch.
• You can make as many withdrawals as you like, there's no penalty.
• You can save up to £5,000 at the 2% rate, above that the rate drops to 0.2%.
• Interest's paid monthly.
• Halifax shares its £85,000 UK savings safety guarantee with the rest of the HBOS group including Bank of Scotland, AA, Saga and BM Savings.

The Cambridge Building Society pays 2% AER fixed for three years on balances from £1,000 to £20,000, though you can only make one deposit and can't add to it.

Think carefully before getting a fixed account, as rates are higher on most of the accounts above – the only reason to open this is to lock the cash away.

Need-to-knows

• The account can be opened by a parent or guardian, who must be in charge of it until the child reaches 18.
• You must open the account by post or phone.
• You can deposit a maximum of £20,000.
• Early withdrawals and account closures aren't permitted.
• Interest is paid annually on 31 December.
• Cambridge BS has the full £85,000 UK savings safety guarantee.

The Kent Reliance two year fixed rate bond pays 1.85% AER fixed for two years and has no minimum age – making it a good option to use as a children's savings account.

While the rate is lower than the Cambridge account above, the fixed term is a year less so could be a better option. Unusually for a fixed savings account you can also access your cash or close your account early – though there's a hefty 180 days' interest penalty on anything withdrawn.

Need-to-knows

• The account can be opened by a parent or guardian, who must be in charge of it until the child reaches 7.
• You must open the account online, by post or in branch.
• You can deposit a maximum of £1 million.
• Early withdrawals and account closures are permitted subject to 180 days' loss of interest.
• Interest is paid annually or monthly.
• Kent Reliance has the full £85,000 UK savings safety guarantee.