Children’s bank accounts are designed specifically for teenagers and younger. They’re for parents who want to get their children started on saving early so that by the time they’re 18 they’ll have some savings of their own. Here's how to pick the right one for you and your kids.
There's no single bank account that's best for everyone, what's best for you might not be best for someone else. Take a look at some kids savings accounts in the table below and see if any are right for you.
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The best kids savings accounts will have the following features:
| Response | Female | Male |
|---|---|---|
| I do not have children | 36.55% | 32.52% |
| 1 - 2 | 13.62% | 10.71% |
| 5 - 7 | 11.72% | 11.28% |
| 8 - 10 | 6.38% | 11.47% |
| 14+ | 8.28% | 10.34% |
| My children are too young for a bank account | 6.55% | 8.46% |
| 0 | 8.28% | 3.38% |
| 3 - 4 | 3.97% | 6.77% |
| 11 - 13 | 4.66% | 5.08% |
This table shows the interest rates of a few of the best kids savings accounts and the conditions that apply for those rates.
| Product name | Maximum interest rate | Conditions that apply |
|---|---|---|
| Great Southern Bank Youth eSaver | 5.5% | Available on balances up to $5,000 |
| Commonwealth Bank Youthsaver | 5% p.a. | Maximum rate is paid if you make at least one deposit to the account and have no withdrawals during a calendar month. |
| MyState Bank Bonus Saver | 5% p.a. | Deposit at least $20 into the account each month and make five or more Visa Debit card transactions from your linked transaction account. |
| Illawarra Credit Union Wildlife Saver | 2.5% | Deposit $10 a month and make no withdrawals. |
| IMB Zoo Account | 4% | Deposit $10 a month and make no withdrawals. |
| Police Bank Dynamo Kids Savings Account | 2.05% | Deposit $20 a month |
When looking for the best kids savings account for your child, here's what to consider.
Childrens savings accounts typically have fewer fees and costs than other types of accounts, but some may still apply. If you’re not careful, you might end up losing a significant amount to fees in the long run, as well as more in lost interest. Most kids savings accounts have no fees.
Not all kids savings accounts have the same age retractions in place. Some accounts can be opened by children as young as 12, while others require you to be at least 14 or older.
Check what happens with the kids savings account when the child turns 18. Some accounts will remain open until you choose to close it, while others will automatically switch to the standard savings account product with that bank.
If your child needs to deposit a set amount into the account each month in order to earn interest, make sure it's not too high and is an achievable amount. Otherwise you could discourage them from saving.
Kids savings accounts usually have a balance limit that's a lot lower than adult savings accounts. Some kids accounts will only pay interest on balances up to $5000, for example, while others will pay interest on much larger amounts.
"I check my bank account at the end of each month using the app on my phone to see how much bonus interest I've earned. Usually it's not much! But it's fun to keep track of it. I bank with ANZ and I like that I have a savings account to save up for things like concert tickets, plus an everyday account that I can add to my Apple Pay."
It depends, on how old they are and how much they earn.
If your child is less than 16 years old, special rules apply to any interest they make from a savings account.
If your child is under 16 and:
Once your child turns 16, as long as they provides their TFN, the financial institution will not withhold tax on any interest earned.
If your 16 or 17 year old doesn't provide their TFN, the financial institution will withhold PAYG tax at 47% and they need to lodge a tax return to get it refunded.
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