Parents and caregivers looking to help children build financial habits can choose from several types of children’s savings accounts. These options vary in interest rates, access rules, and fees.
Easy Access Accounts
Easy-access accounts allow children to manage their own money once they reach a certain age. These are typically available to anyone under 18.
- FSCS protected. Requires a FlexOne current account.
- FSCS protected. No debit card. A portion of the average balance is donated annually to the Demelza Children's Hospice.
- FSCS protected. Debit card available from age 11. Can be opened online if a parent has an HSBC account.
- goHenry Kids' Debit Card : Monthly fee of £3.99 for one child. No parent account required. Offers 2 months free and £5 pocket money. Interest not paid. FSCS protected. Parents can set chores and use Giftlinks to add money.
Regular Savings Accounts
These accounts offer higher fixed or variable interest rates but limit monthly contributions. The account closes after a set period and transfers funds to a linked savings account.
- Maximum £100 per month. FSCS protected. Can be opened by an adult for a child aged 15 or under. Fixed term of 12 months.
- Maximum £100 per month. FSCS protected. Can be opened by post or in branch.
Junior ISAs
Junior ISAs allow parents or guardians to save up to £9,000 per year. Interest or investment gains are tax-free. Money is locked until the child turns 18.
- Can be opened by post or branch. FSCS protected. Allows transfers in.
- Branch or post opening. FSCS protected. Allows transfers in.
- Branch or post opening. FSCS protected. Allows transfers in.
- Branch or post opening. FSCS protected. Allows transfers in.
- Branch or phone opening. FSCS protected. Allows transfers in.
- Online opening. FSCS protected. Allows transfers in.
Special Offers and Features
Some accounts offer additional perks. For example, the goHenry app includes Money Missions to teach financial literacy. Parents can assign chores and use Giftlinks to add money.
One featured deal is Santander’s £240 switch offer. To qualify, users must complete a full switch via the Current Account Switching Service and meet specific deposit and direct debit requirements within 60 days. The offer includes a 5% bonus on a regular saver account for 12 months.
Tax Considerations
Interest earned on regular savings accounts is generally not taxed. Children can earn up to £18,500 annually from savings and income, including the £12,500 personal allowance, £5,000 savings allowance, and £1,000 personal savings allowance.
If a parent adds money to a non-tax-free account, there is a £100 annual interest limit per parent. For example, a child with £3,000 from one parent would earn £112.50 in interest—still within the limit. This makes Junior ISAs a better option for tax-efficient saving.
Other Ways to Save for Kids
Parents can also consider Premium Bonds. Each bond costs £1, with a minimum purchase of £25. The current prize fund is 3.8%, but winning is unlikely with small amounts. Grandparents and parents can both buy bonds.
Pensions can be opened for children at any age. The funds are locked until age 57, with investment management starting at 18. Contributions receive 20% tax relief, up to an annual limit of £2,880.
Piggy banks remain a simple way to introduce children to saving. However, they do not earn interest. As children grow, transitioning to a bank account is recommended.
Financial education apps like Starling Kite offer free tools to teach kids about spending and saving. Paid apps such as GoHenry and HyperJar provide extra features but offer little interest return.
For a full list of savings accounts, including ethical and fixed-rate options, see the original guide.
Parents should consider their child’s age, financial goals, and access needs when choosing an account. Interest rates and limits vary by provider and account type.
Sources & further reading
Featured image: For your children. Buy war savings certificates and they will… by Gutti, Rosina Mantovani, Public domain, via Wikimedia Commons. Image source
