As your kids get older, look out for top current and savings accounts to help their cash grow.
They say saving is a habit, so encouraging children to save from a young age can instil a financial understanding that lasts a lifetime.
Start very young children off with a good old-fashioned piggy bank and then when they’re older they can choose to open their fi rst savings account. There are a range of options available depending on whether you want to deposit a lump sum, put cash aside regularly or lock the money away until your child turns 18.
Best for lump sum deposits
The Moneywise Best Buy for lump sum deposits is a children’s current account – the Santander 123 Mini current account. This pays 3% interest on balances between £300 and £2,000.
Those with smaller balances also earn interest as the account pays 2% on balances between £200 and £299 or 1% if they have between £100 and £199 in their account. You can open this account in branch or online and there is no monthly fee, unlike the adult accounts in the 123 range. It is available to all kids aged between 11 and 17, and as this is a current account they can also get a debit card in their name.
If your child is slightly younger or has a larger lump sum to save, then consider the HSBC MySavings account. This can be opened in branch and is available to anyone aged between seven and 17. It pays 2.75% on all balances up to £3,000, plus 0.25% on any balance over that amount.
Top paying monthly savers
If you’re looking to build your child’s savings by depositing cash monthly, then Moneywise’s Best Buys both pay 4%.
The Halifax Kids’ Regular Saver account accepts monthly deposits of between £10 and £100. This is available for children aged 15 or under and must be opened in branch.
The Saffron Building Society Children’s Regular Saver can be opened by post or in branch by anyone aged 15 or under. You can deposit £100 a month in this account.
Both these products only last for one year, so remember to move these funds once the accounts mature.
Lock cash away with a Junior Isa
While it is unlikely that your child will be paying tax on their savings, you may want to consider a Junior Isa if you want to lock your cash away until they turn 18. Although remember after this date they will be able to do what they want with the cash.
The Junior Isa limit for the 2017/18 tax year is £4,128, and this can be paid in either as a lump sum or on a monthly basis.
The Moneywise Best Buy is the Coventry Building Society Junior Cash Isa. This pays 3.25% to young savers and can be opened by post or in branch.
Alternatively, Darlington Building Society, Halifax, Nationwide, Tesco and TSB all pay 3%.
You must be under 18 to open a Junior Isa, but when your child reaches the age of 16 they can also open up a Cash Isa or a Help to Buy Isa. Once they reach 18, they’ll also be able to transfer their Junior Isa cash into an adult version.