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Martin: The Top Children's Savings so your ickle ones can earn bigger interest, up to 5% 

Including junior ISAs, hidden £1,000s in Child Trust Funds, Premium Bonds for kids?, top debit cards, kids' pensions

There's no better financial lesson for children than, if you're going to save with a bank, as it can use your money (to loan out to other people), then it should pay you! And as different banks pay different amounts called 'interest', find the one paying you the most...

Kids' savings rates are helped by the fact the maximum amounts that can be saved aren't high, making it cheaper for banks to offer them (in the hope they may end up buying a wee person's custom for life).

Let's start with the top standard savings. While these are taxable, that's not usually an issue as most children don't pay tax. The two types are suitable for different purposes, and there is no problem having both. All savings I mention today have the full UK £85,000 savings safety protection.

Top children's fixed savings. These are good if you're worried that UK base rates may drop and you want a guaranteed rate for larger amounts, or if you want to lock your children's money away so it can't be touched. The top fixes are State Bank of India 1yr 3.95% (min £1,000), Saffron BS 2yr 4% (min £500), Cambridge BS 3yr 4.05% (min £1,000).

PS: A parents warning! I know many scrimp & save to put money aside for their kids, but it's a bit like aeroplane oxygen mask rules: "Put your own on before your child's." If you're struggling to breathe financially, you can't help them. Building a nest-egg for the kids isn't the priority: family financial security is - only do it after sorting costly debt and ensuring urgent living costs are met.

A junior ISA is a tax-free savings wrapper you can save up to £9,000 per child every tax year in (so those lucky enough to fill it each year can have many £10,000s). It must be opened by a parent or legal guardian, not say a grandparent. 

Its predecessor, Child Trust Funds (more on them below), are similar, and can now be converted into junior ISAs - a good idea for most.

Junior ISAs aren't for everyone though - there are two prime uses: 

• They're good if you want to lock money away till the child is 18. The money is only accessible on the child's 18th birthday. So it's a simple way to put money aside for their future without them getting their (or in some cases, their parents getting their) hands on it before. 
  
  Yet on the day they're 18, it's their money, in their control. So if you're saving it for them to use at uni, they may decide to buy a Taylor Swift-themed camper van instead (she may be a bit old then, but you get the point).
  
  
• Junior ISA savings and investments are always tax-free. If you save in a junior cash ISA the interest isn't taxable, if you invest (via a stocks & shares junior ISA), any income or capital gains on the share growth is tax-free too. So it's a valuable extra protection, but only if your children pay tax or may do in the future... 
  
  

Should I pick a junior cash or investment ISA?

While I normally focus on savings, it's important to point out there is a strong argument to invest rather than save for your child, especially if they're young. The general investment rule is if you're putting money away for over five years, on the balance of probability, investing will likely significantly outperform saving. 

With junior ISAs you're often putting money away for far longer periods: it should, hopefully, mean much greater growth, even more than the top savings account. So putting some money in there (or in other investments) is often a good idea. You can have both a cash junior ISA and a shares junior ISA, as long as you don't put over £9,000 in per tax year.

Investing isn't risk-free - you do it in the hopes of far higher growth, but at the risk you could end up with less than you put in. Yet if you do it in a wide spread of investments (eg, UK and global index tracker funds, which monitor the performance of stock market indices), that reduces the risk, and this could end up giving them a much bigger nest-egg. So you may be doing a disservice to your child by not giving them that chance.

If you're investment savvy, you can use a provider that lets you pick individual funds and shares yourself. We've not done a full comparison but I'm talking the likes of Hargreaves Lansdown*, AJ Bell* and Fidelity*, which all offer a huge choice within their junior ISAs. 

If you're new to this, then robo-investors, for example Aviva's Wealthify* and Moneyfarm, pick funds automatically for you. Better still, if you already have a financial adviser, speak to them. For more help, while they're aimed at adults, listen to my 'Beginner's guide to investing' podcast and read our Investment ISA guide.

PS: This is a great topic to discuss with teenage children to educate them about the markets. You could set up a dummy portfolio, where they choose the investments (without real money) and see how it does.

All UK children aged roughly 14 to 23 were automatically given a Child Trust Fund (CTF). It's the tax-free predecessor of the junior ISA, and works almost exactly the same way: the money being locked away until your child is 18. Yet there is one big difference...

... the state paid in £250 to start CTFs off (£500 for those in lower-income families), so even if parents, grandparents and others didn't put anything in it, every child of that age has some money in it. Unfortunately, many have lost track of it. What you do depends on your situation:

• Know where the CTF is, and the child is still under 18? CTF savings rates are poor as it's now a dead account, and financial advisers tell me the choice of investments isn't that great in the shares version. 
  
  The good news is if your child has a CTF, you can convert it to a junior ISA, where the rates are better. To do that, you just apply for the junior ISA and fill in the CTF details in the transfer section. For all the details, read the junior ISA section above.
  
  
• Don't know where your CTF is? You may have £1,000s sitting in one! Official stats show, 728,000 may have a CTF and aren't aware of it, with an average balance of over £2,200 (though this can vary hugely with age, whether it was an investment, and whether any money was added). 
  
  
  - If you already know your CTF provider, you can contact it directly.
  - If you don't know your provider, there is a FREE tool via Gov.uk to help you find it - there's absolutely no need to pay. Parents can do it for under-18s, and over-16s can do it themselves (and yes even if you're over 18 you can still trace the money, it's yours!).
  - You should get a response from HM Revenue & Customs within three weeks telling you which provider has your cash. See our Reclaim your Child Trust Fund guide for full detail.
  
  Delightfully, Kirsty emailed to say: "As an adoptive family we didn't know anything about Child Trust Funds until I read one of your newsletters. I followed the advice, was informed where the funds were originally set up, and we found both funds were valued at about £1,000 each. Thank you so much for raising our awareness."
  
  

• Over 18 and got/had a Child Trust Fund? If you do (or did) nothing at the age of 18, the CTF will mature into the same provider's cash or investment ISA, which may well be pants. So it's worth you locating the money, and making a proper decision of what you'll do with it. See our what to do with maturing Child Trust Funds / junior ISAs help.

Savings accounts are a place to store money you don't intend to use frequently. Yet many children need a way to spend their money too, and with the ongoing digitisation of payments, now it's via contactless cards, phones and watches, that usually means you need a vehicle to do it with. There are two main types:

1. Children's bank accounts. You have money in these and can spend it through a debit card, just like an adult's account. Pros: No fees | May pay interest | All money in there fully protected. Cons: Fewer controls for parents | Often only available for over-11s.
   
   There's full info in top kids' bank accounts, but our top picks in brief are... the Santander 123 account, as discussed above, with its free £15 sign-up bonus and up to 3% interest. Plus the Nationwide FlexOne, which pays 2% interest on up to £1,000 and has a linked savings account paying 5% on up to £5,000.
   
   
2. Prepaid cards. Here you load up money on to the card that you want to spend. Pros: Lots of spending controls for parents | Available for younger children. Cons: No interest | Some have costly fees | Lesser e-money savings protection, so don't keep too much in. There's full info in top kids' prepaid cards, but our top picks in brief are:
   
   - Open to all, mostly free. The HyperJar* card (ages 6 to 17) is a spending card, but you can't withdraw cash from ATMs. There's a £5 delivery fee, and after that the card is usually free, unless you're doing a lot of top-ups (over 11) a month. To get it, the adult has to get a free virtual card of their own.
   
   - Free cards if parent has an account. There are a few cards that are totally free if the parent has an account there. These allow both spending and ATM withdrawals. There's Starling Kite, NatWest Rooster and Revolut*.
   
   - Best known & rated tools, but you pay. The most famous kids' prepaid card is GoHenry* (ages 6 to 18). It has a £4/mth fee though (code AFFMSE25 gets £5 cashback and two months free). Its big selling point is extra financial education tools. Full info in our Top kids' prepaid cards guide. 
   
   PS: All these cards give your children perfect exchange rates when spending abroad.