Can you open a savings account for your grandchild in Australia?
While you cannot 'gift' a savings account to a child in Australia, you may be able to open an account for them where you help them save for their future.
In some countries, such as the United States and Switzerland, you are able to give a gift savings account to a child. While this is not permitted in Australia, there are other ways to help your grandchild build their savings.
Can I open a savings account for my child or grandchild?
Many banks specify that you must be either a parent or guardian in order to open a bank account on behalf of a child. However some banks, like Greater Bank and allow anyone to open an account for a child, while other banks – like NAB – only allow parents and guardians to open an account for a child.
These savings accounts are in the child's name, but managed by the adult until the child reaches an age where they are mature enough to take on the responsibility themselves – usually from 14 years. Opening a savings account for a child could be used to help teach children budgeting, saving and managing their money. Technically, you cannot gift a savings account to a child in Australia, but if you are a grandparent wishing to set aside money for your grandchild, you could work with your grandchild's parents to open a suitable account.
The reason these somewhat strict rules are in place is because money in the account is earning interest, and depending on the account balance, the child named on the account may be subject to tax on their interest earnings.
Loretta has decided that this year for Christmas she is going to open a savings account in the name of her grandchild Brian with Suncorp Bank. As his legal guardian, she is permitted to do so as long as she can provide Suncorp with a copy of his birth certificate. With this account, her grandson can earn bonus interest when a monthly deposit requirement is met, and electronic deposits can be set up from her own bank account or from anyone else. Loretta's friend Joy also wishes to set up an account for her grandchild, but as she's not a legal guardian, she has to find a bank that allows her to open the account, or ask her daughter if she can set up an account for her grandson, so Joy can transfer money to it every month.
* This is a fictional, but realistic, example.
What are the tax implications of opening a savings account for a child?
For a savings account held in the name of the child, there is a tax-free threshold of up to $420 per financial year. Anything above $420 would need to be included on a tax return and tax will be withheld at the highest current tax rate, currently 47%.
No tax will be withheld but the bank if the child is:
any age, and they earn less than $120 per year from savings accounts, their financial institution will not withhold tax.
under 16 and they earn between $120 and $420 from savings accounts per year, and they provide a tax file number.
aged 16 or 17 years old, earns $120 or more from their savings account per year, and they provide their TFN.
If you don't provide a tax file number and interest is earned above these thresholds, the child will need to register a tax file number and complete a tax return to get any interest owed to them refunded.
To complicate things a little further, who fills out the tax return with the interest from the savings account depends on who owns and uses the funds.
If a parent deposits money into the account and withdraws funds to pay for school expenses, any interest earned must be included on that parent's tax return.
If parents or other family members simply deposit money into the account, the interest belongs to the child.
We currently don't have a partnership for that product, but we have other similar offers to choose from (how we picked these
):
Finder survey: What savings account features do Australians value most?
Response
A competitive interest rate
62.31%
A bank I know and trust
52.59%
No restrictions on monthly withdrawals
31.97%
A simple application process
21.81%
The connected transaction account
15.98%
A low deposit requirement
13.17%
Extra features like round-ups or savings buckets
4.75%
None of the above
4.21%
Other
2.81%
Source: Finder survey by Pure Profile of 1113 Australians, December 2023
What's the youngest age you can open an account for a child?
There is no minimum age limit to open a bank or savings account for a child, but you will need to check with the individual bank for full eligibility criteria. Some banks have different savings accounts for children of different ages.
While there is not a minimum age for a savings account, there are maximum ages. Some accounts are for children under 14, some for under 16 and others for under 18.
Other ways to gift savings to children
A high interest savings account or a term deposit is an alternative to a standard savings account. Of course, the same rules would apply in terms of tax on interest earnings and parental access.
If you're looking to avoid tax implications, you could start them off with a simple piggy bank where they put their spare change away for a rainy day purchase.
An insurance bond can also be established in a child’s name and work like a managed fund to save toward educational or other large expenses. There are also tax advantages to opening this type of gift savings product that make holding onto it for an extended period of time worthwhile.
Frequently asked questions
Yes, parents or guardians usually manage the account until the child reaches a certain age, typically 18, after which the child gains full control.
Look for accounts with no fees, competitive interest rates, and educational tools that teach kids about money management.
Yes, many banks allow you to link a kids savings account to your own for easy transfers and monitoring of the account's balance.
When the child turns 18, the account typically converts to a regular savings account, giving them full access and control over the funds.
Rebecca Pike is Finder's senior writer for money. She joined Finder after almost four years writing for business publications in the mortgage and finance industry, including three years as editor of Mortgage Professional Australia. She regularly appears as a money expert on programs like Sunrise and Today, as well as across radio and newspapers. She also holds ASIC-recognised certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products. See full bio
Rebecca's expertise
Rebecca has written 201 Finder guides across topics including:
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What is the best account and bank to open a bank savings account for my new born son?
Finder
AlisonNovember 22, 2022Finder
Hi David,
We’re a financial comparison site and can’t give you any personal advice as to which products are best for you. You can learn more about opening a bank account for a baby and see a list of kids’ savings accounts on this page.
Thanks,
Alison
TriciaNovember 17, 2017
I would like to save some money for my grandson.
Bank accounts / term deposits have low interest rates
Can I open a share account for him?
MariaNovember 18, 2017
Hi Tricia,
Thank you for your inquiry.
Application requirements can vary between different international share trading account providers. Generally, the age requirement for personal applicants would be over 18 years old. This guide on international share trading might provide more insight.
It would be best to check this directly with the Share Trading Provider so you can confirm what they can offer you based on your preferences.
I hope this helps.
Best,
Maria
itsivmJuly 8, 2017
Sorry, I mistakenly posted the first part of my email before I had finished. My question is this – I was thinking of sending £600 to £1000 once a year to my Australian grandchild directly to his bank account. Of course, the exact $AUD amount depends on the currency exchange at the time. Is there a maximum that can be deposited/gifted by a grandparent? Thank you.
LiezlJuly 8, 2017
Hi Itsivm,
Thanks for your question.
This will depend on which bank the child’s savings account was opened, best to confirm this with the bank. While most banks do not have a maximum deposit limit, there is, however, a maximum interest that can be earned by the child account for the financial year that is considered tax-free, as mentioned in the case study above.
I hope this has helped.
Cheers,
Liezl
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What is the best account and bank to open a bank savings account for my new born son?
Hi David,
We’re a financial comparison site and can’t give you any personal advice as to which products are best for you. You can learn more about opening a bank account for a baby and see a list of kids’ savings accounts on this page.
Thanks,
Alison
I would like to save some money for my grandson.
Bank accounts / term deposits have low interest rates
Can I open a share account for him?
Hi Tricia,
Thank you for your inquiry.
Application requirements can vary between different international share trading account providers. Generally, the age requirement for personal applicants would be over 18 years old. This guide on international share trading might provide more insight.
It would be best to check this directly with the Share Trading Provider so you can confirm what they can offer you based on your preferences.
I hope this helps.
Best,
Maria
Sorry, I mistakenly posted the first part of my email before I had finished. My question is this – I was thinking of sending £600 to £1000 once a year to my Australian grandchild directly to his bank account. Of course, the exact $AUD amount depends on the currency exchange at the time. Is there a maximum that can be deposited/gifted by a grandparent? Thank you.
Hi Itsivm,
Thanks for your question.
This will depend on which bank the child’s savings account was opened, best to confirm this with the bank. While most banks do not have a maximum deposit limit, there is, however, a maximum interest that can be earned by the child account for the financial year that is considered tax-free, as mentioned in the case study above.
I hope this has helped.
Cheers,
Liezl