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Best Children's Savings Accounts
Compare children’s savings accounts
It is generally a good idea to get children used to the idea of saving their money at a young age, so they will be more likely to manage their money responsibly as they get older.
A savings account can allow kids to put aside some or all of their pocket money, and any money they receive for special occasions such as birthdays and Christmases. This money can form a nest egg to go towards any number of big expenses, such as buying a first car, going to university or even saving towards the deposit on a house.
There are various different savings accounts to choose from and different issues to consider to make sure you get the right savings plan for your children.
Do children pay tax on their savings?
Many people think that children do not have to pay tax, but this is not true. Children have the exact same tax liability as adults, but most children do not earn enough to ever actually have to pay any tax.
When it comes to their savings, children have the same personal savings allowance as adults, meaning they can earn up to £1,000 tax-free interest on their savings.
As most children have no income, they can also use their personal tax allowance against any interest earned from savings. For the 2018/19 tax year, this personal allowance is £11,850.
Children with no significant income are also likely to qualify for the £5,000 starting savings allowance, applicable to those on a low income.
This means most children can earn up to £17,850 in interest on their savings in the 2018/19 tax year without paying any tax.
The best savings accounts for children
There are various savings accounts that let your child put money aside and earn interest. Which account will be the best choice for you children will depend on how much they have to save and what they want to use those savings for.
Barclays Children’s Regular Saver account
Barclays Children's Regular Saver account is a short term savings account, designed to let your child build up their savings over 12 months. It can be accessed online, by mobile or in branch, and allows your child to save up to £1,200 over a year.
Simply deposit anywhere from £5 to £100 into the account each month, via standing order for 12 months, and your child will earn competitive interest for every month where they make no withdrawals. If you child does make a withdrawal, they will still earn good interest on their savings.
Halifax Kids’ Regular Saver
The Halifax Kids' Regular Saver is a monthly savings account for children aged 15 and under. It allows you to make regular monthly deposits for 12 months, after which the money accumulated is transferred into Halifax Young Saver account or any other account of your choice.
You can save from £10 to £100 per month and will received interest competitive interest, but you are not allowed to make any withdrawals until the year is up. You can apply for an account in branch or online, but the account can only be managed in branch.