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Best Children's Savings Accounts
Why we like it: Can be opened by or on behalf of any child up to the age of 18. Debit or cash card available for those aged between 13 and 18. Monthly interest. No monthly fee. For children under age 13, the account must be opened in trust and managed by an adult (trustee). If you’re aged between 13 and 18 years old and live permanently in the UK you can apply online by telephone or in branch. No overdraft facility. 1% interest on the entire balance once the balance is £100, 2.00% AER/1.98% gross (variable) on the entire balance once the balance is £1,500, 3.00% AER/2.96% gross (variable) on the entire balance once the balance is £1,500 or over (up to a maximum of £2,000)
Why we like it: Invest tax-free from £10 a month or a £50 lump sum — or a mix of both.You can raise, lower, stop and restart your payments any time you like. A selection of eight funds to choose from, so you can tailor your child's investment
Disclaimer: The value of your investments can fall as well as rise, so your child could get back less than you paid in.
Why we like it: Shepherds Junior ISA lets you save regularly to offer your child a head start in life. You can save up to £4128 a year TAX-EFFICIENTLY if your child is aged under 18 and does not already have a Child Trust Fund in their name. You can invest from just £10 a month and can pay in lump sums from a minimum of £100 initially and £10 at a time thereafter. Apply for a Shepherds Friendly plan online and get a Love2Shop voucher code worth up to £50* once you’ve made your first payment into the plan
Disclaimer: Stocks and Shares Junior ISAs offer the potential for higher returns than Cash Junior ISAs, particularly if you choose to invest for the long-term. However, you do need to know that, as the underlying value of your child’s investment is linked to the fluctuations of the stock market; although the value cannot fall there is no guarantee that bonuses will be added each year.
Why we like it: Investing for the child offers the potential for higher returns over the long-term on their money than would be available by saving in most cash savings accounts, however there are no guarantees with regards to the size of the bonus that will be paid each year.
Disclaimer: Investment growth is by means of bonuses, the amount of which cannot be guaranteed throughout the term of the contract.
Why we like it: The Shephereds Junior Money Maker Plan is a tax-efficient investment plan for children which aims to provide the child with a tax-free lump sum that they can use to help them towards the cost of paying for university, or to assist with any other goals they may have, such as buying a home or starting a career. The plan is designed to help you save enough over the long-term to cover the majority, if not all of the child’s fees when they start higher education, and offers a unique withdrawal process that allows them to take the money gradually throughout their university career. Apply for a Shepherds Friendly plan online and get a Love2Shop voucher code worth up to £50* once you’ve made your first payment into the plan
Disclaimer: Investing for the child offers a greater potential for growth over the long-term than is typically available in a cash-based savings account, but you should consider that, unlike cash accounts that tend to have a set interest rate, the size of each annual bonus is not guaranteed.
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.