May 2024 editorial picks for best kids bank accounts by type:
Here are our picks for the best kids savings and transaction accounts this month. You can also see alternative prepaid card and money app products that are also really useful for young savers.
Best kids savings account - Great Southern Bank Youth eSaver Account
Great Southern Bank Youth eSaver Account (0-17 year olds only)
The Great Southern Bank Youth eSaver Account is the best youth savings account. If you're aged between 0 and 17 you can get this ongoing variable rate of 5.5% p.a. Available on balances up to $5,000.
Won the Best Kid Savings Account in 2023 Finder Awards
No monthly fee
Competitive interest rate for under 17s
No monthly deposit conditions to meet
Age restrictions apply
Interest only available on balances up to $5,000
Rewards program
N/A
Annual Fee
$0
Purchase Rate
Welcome offer
Interest-free period
Up to days on purchases
Balance transfer
N/A
Bonus points
N/A
Rewards points per $ spent
N/A
Foreign currency conversion fee
Best kids transaction account - Macquarie Transaction Account
The Macquarie Transaction Account is one of the best bank accounts in the market if you're wanting to also earn interest on your balance. Your bank account balance will earn 4.75% p.a. interest with no conditions to meet, helping you save more money. It also has no account keeping fees, no international ATM fees and pays a refund on any local ATM fees charged.
Earn interest on your balance
No ATM fees
No international purchase fees
No monthly account keeping fees
Convenient on-the-go banking with the mobile banking app
No branch access
Rewards program
N/A
Annual Fee
$0
Purchase Rate
Welcome offer
Interest-free period
Up to days on purchases
Balance transfer
N/A
Bonus points
N/A
Rewards points per $ spent
N/A
Foreign currency conversion fee
Kids' prepaid card and money apps
If you want to teach your child how to spend and save in a safe, kid-friendly way, you could try a prepaid card linked to a money app.
These apps let you set spending limits, track chores and pay pocket money. There is a monthly subscription fee.
Spriggy is a mobile app with a linked prepaid card which helps Australian parents and their kids to manage their money together and track their progress in a fun, interactive app.
30-day free trial available
Customised prepaid debit card
Safe and convenient
3.5% surcharge for international purchases
Membership fee charged as annual lump sum payment
Can not withdraw cash from ATM
Rewards program
N/A
Annual Fee
$0
Purchase Rate
Welcome offer
Interest-free period
Up to days on purchases
Balance transfer
N/A
Bonus points
N/A
Rewards points per $ spent
N/A
Foreign currency conversion fee
In an increasingly cash-less society, I underestimated how much card access my 12-year-old would need. Even her school tuckshop doesn't accept cash! Finding a savings account with a debit card and importantly, one we could add to her phone, was an unexpected part of our journey.
Every month at Finder we examine all the savings accounts in our database and determine our top picks for different types of customer.
When picking our top kid's savings account and kids' transaction account, we judge products based on these factors:
Interest rate. Our savings account picks have competitive interest rates.
Monthly fees. We pick products with low or $0 ongoing fees. This way your kid's pocket money won't get eaten up by monthly account fees.
Minimum account balance. We exclude accounts that require you to have a large amount of money in the account, as this is not suitable for kids.
Age restrictions. We pick accounts that are available to under 18s.
Account conditions. We don't pick accounts that require savers to meet too many conditions in order to earn more interest or hold the account. Kids need simple accounts.
Is there a difference between bank and savings accounts for kids?
There are 2 types of bank accounts:
Savings accounts. You use this account to hold your savings long term and earn some interest. It is not designed for spending.
Transaction accounts. You use this account for everyday spending via a debit card. You might be able to earn some interest, but the account is mainly for spending.
Kids savings accounts
Most parents open a savings account for their kid first. This lets them slowly build up money for their child's future while earning interest. And it gives their kid a place to put pocket money or birthday/Christmas money.
The best kids savings accounts encourage saving with a decent interest rate. Some offer a base rate only, while others encourage kids to save with a bonus rate. You only earn the bonus rate if you meet specific conditions, such as saving a certain amount each month.
Kids transaction accounts
As children reach their teens they might also need a transaction account with a debit card. This gives older children a bit of financial independence and the opportunity to learn how to responsibly use their money.
How to compare savings accounts for children
High interest rate. An account with a high interest rate means your child can earn a bit more interest on their savings.
Low fees. A good kids savings account should have few if any fees. A small monthly fee could quickly eat away at your child's previous savings and discourage them.
Minimum age requirements. Some banks let you open a savings account at any age. Some banks require the child to be 12 or older. It's important to check before trying to open an account.
Minimal account conditions. An ideal kids bank account will have a low minimum opening balance, and won't require large deposits every month to qualify for the bonus interest rate.
Money management tools. A good kids bank account offers app functionality or an online account so your child can watch their savings grow and learn how to manage their money. Some banks won't let a child open an online account until they're 14, or may require parental approval.
My husband once sold an old digital drum kit online for $100. A 10-year-old kid arrived with his mum to pick it up – he'd saved his pocket money. It was so wholesome, and a reminder that kids are never too young to learn about money! And you're their biggest influence. You can help your child build really positive money values with things like pocket money for chores, setting saving goals, and chatting about how you handle your budget.
How does bonus interest work on a kids' bank account?
Some banks encourage children to save a little money each month with a bonus rate. A savings account might have a base rate of 2.00%, but a bonus rate that takes the total rate up to 5.00% if you meet the conditions.
This might be saving a minimum amount each month or not making any withdrawals. Here are some examples.
If you are the parent or legal guardian of a child, you can open a bank account for them at any age. Depending on the age of your child and the bank's policy, you may be able to open a bank account online. Or you may have to visit a branch.
You'll need to provide:
Evidence of the child's identification. You can use a birth certificate, Medicare card, passport or driver's license (for older kids).
Identification for yourself. You should also bring your own ID and proof of your relationship to your child. This includes a Medicare card or birth certificate.
You can choose to be an authorised party on your child's bank account. This gives you some level of access or control over the account. But the level of access depends on the account and the age of your child.
Frequently asked questions on children's savings accounts
No, according to the Australian Taxation Office (ATO), any income that you put into your kid's savings account needs to be declared in your individual tax return. This means that you'll be looking at the same marginal tax rate anyway.
You're not required to open the account as a trustee. You can add yourself as a signatory and then transfer it to the child later. If you are starting a trust for your child for estate planning purposes, you may want to speak to a financial planner about what trust structure is best for you.
It is not required to have a TFN to open a kids savings account, though ensure the account is marked "Under 16 - TFN Exempt".
In Australia, the law requires that these accounts hold money that solely belongs to a minor child. A parent may not use this type of account to save for school costs or other expenses related to raising children.
Most banks require you to be the child's parent or legal guardian in order to open an account for them. You will also need the child's birth certificate and a form of identification for yourself in order to open a bank account for the child.
If a savings account earns interest then this interest is usually taxed. This works a little differently for children.
If a child's account earns less than $120 a year in interest, no tax is withheld.
If a child is under 16 and earns between $120 and $420 in interest in a year, the bank won't withhold tax if you provide their date of birth or a tax file number. If you don't provide either of these, then you can lodge a tax return to get the interest refunded
If a child earns more than $420 a year in interest they need to provide a tax file number to avoid having tax withheld, or lodge a tax return to get a refund.
If a child is 16-17 years old and earns more than $120 in interest a year, they need to provide a tax file number to avoid having tax withheld, or lodge a tax return to get a refund.
You can apply for a tax file number for your child at any age.
A kids transaction account is an everyday bank account designed for spending, not necessarily saving. It often comes with a linked debit card (or similar) to make purchases in stores or withdraw cash from ATMs. Usually you'll need to open a kids transaction account on behalf of your child while they're under 14.
Why you can trust Finder's banking experts
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We've researched and rated hundreds of accounts for our Finder Awards. We've published 100+ guides and our in-house experts regularly appear on Sunrise, 7News and SBS News.
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Unlike other comparison sites, we're not owned by a bank or lender. That means our opinions are our own and you can compare nearly every bank account in Australia on Finder.
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Since 2015, we’ve helped over 1.3 million Australians find an account. We'll never ask for your personal information. We're here to help you make a decision.
Alison Banney is the money editorial manager at Finder. She covers all areas of personal finance, and her areas of expertise are superannuation, banking and saving. She has written about finance for 10 years, having previously worked at Westpac and written for several other major banks and super funds.
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