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Kids Savings Accounts

Compare a range of savings accounts with Savvy to see if any options are available for your kids.

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, updated on July 28th, 2023       

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Are you looking to grow your savings?  Compare a wide range of savings accounts with Savvy so you find the best deal in Australia and the highest interest rate to help grow your savings.  

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Compare and find the best savings accounts for your kids

Finding the perfect savings account for your child can be the first step they take into the world of managing their finances. Setting them up with an effective account by the time they reach adulthood and are ready for financial independence can give them the leg-up that many young Australians are looking for. Read more about how the best type of savings account for kids works and how to compare its multitude of options to find the best ways to establish savings for your child.

How does a kids’ savings account work and how is it different to others?

A kids’ savings account, also known as a youth or children's savings account, functions in largely the same way as a standard savings account, although it comes with a few key areas that are altered to cater to the needs of children. Firstly, it’s restricted to account holders under the age of 18. In some cases, however, children as young as 14 could become ineligible to hold a kids’ savings account.

Monthly account fees which are often present with standard savings accounts are generally waived when it comes to kids’ savings accounts. Also, you may find that your account provider supplies resources to help educate young account holders about the ins and outs of finance and why it’s important to know about.

Perhaps the most noteworthy difference between this type of savings account and others, though, is that interest rates can be higher for children than adults. Some accounts will offer bonus interest rates upwards of two or three times the standard savings account interest rate, which means that it’s useful for growing your child’s funds as they progress from youth into adulthood.

Additionally, parents can hold some form of control over their child’s account up to a certain age, which can vary between the ages of 13 or 16 depending on your bank or other financial institution. This can grant the ability to place restrictions on your child’s spending habits or their ability to transfer funds.

However, a downside to kids’ savings accounts is that age limits will apply, meaning that your child’s account could be closed or convert automatically to another type of account once they reach a certain age. Depending on your financial institution and the type of account your child has, this could range anywhere between 12 and 18. It’s always important to be mindful of these conditions to prevent an account rolling over into a different savings account that you may not wish to open.

Some accounts of this type will also limit the number of times you can withdraw to five or less, while others may not allow any withdrawals at all without eating into your interest earned. You should try to avoid accounts with such restrictions where possible and stick to those with a higher base rate.

How do I compare different kids’ savings accounts?

Part of the process of finding the right kids’ savings account for your child is surveying the market. Fortunately, you’ll find that there are several points that you can look at when comparing each different account. Always look into the following aspects of a kids’ savings account:

Interest rates

Perhaps the main motivator to set up your kids’ savings account in the first place, interest rates are certainly an important factor to consider when comparing between accounts. As mentioned, there’s potential for high interest rates with a kids’ savings account, so you should enter this process aware of the far greater base rates available.

Bonus interest rates

If you’re confident that you’re able to meet the conditions required to achieve a high bonus rate on your kids’ savings account, either as the account holder or parent, bonus interest rates can be a great incentive and financial benefit for doing so.

Account fees

While most kids’ savings accounts waive monthly fees, this may not always be the case. Additionally, you may be charged a fee for exceeding a pre-determined quota of monthly withdrawals, so ensure that your kids’ bank account doesn’t enforce restrictions in areas that you may use regularly.

Child-friendly banking features

It’s worth checking out each account provider’s website ahead of time to see if they offer any resources to help kids’ account holders learn more about the world of saving and finance. Some financial institutions in Australia afford access to programs for young account holders to educate them more on the topic.

Accessibility

As a parent, you’ll want as much control over your young children’s savings accounts as possible. Almost every financial institution will offer extensive online services or apps to manage your kids’ savings accounts, but you might find that some are more suited to your style of management than others.

Types of savings account

Online accounts

Your account doesn't have to be with a bricks-and-mortar bank. By opening an account with an online institution, you can manage your funds via online banking and apps.

High interest accounts

When it comes to growing your savings, the higher the interest, the better. High interest accounts can either come with higher base rates or steep bonus rates.

Kids' accounts

Opening an account for your child can be a great way to give them a head-start with their savings and help teach them about the responsibility of managing their money.

Student accounts

Keeping track of your funds and growing them is important as a student. Some providers offer special accounts with high interest and no fees to help you boost your savings.

Joint accounts

There are many reasons why you may need a joint account, such as if you're combining funds with your partner or managing your parents' money with your siblings.

Business accounts

Businesses have different needs when it comes to their savings, so many banks and other financial institutions offer specialist products designed to offer flexibility.

Bonus interest accounts

Many savings accounts offer bonus interest, which can offer a much higher rate if certain conditions are met, such as a set number of deposits or linked transactions.

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The pros and cons of kids’ savings accounts

PROS

Build interest for your child

High rates on youth savings accounts mean that you can earn a meaningful amount in interest throughout their childhood

Help educate about finance

Entrusting some level of savings account access to your child can help teach them about the importance of financial responsibility

Parental oversight

Parents can control the account to ensure that their child doesn’t spend all of their savings irresponsibly or accidentally

Fee-free

You’ll find that the vast majority of kids’ savings accounts avoid any charges for the maintenance of the account, which can save a reasonable amount in the long run

CONS

Account conditions

Some accounts may come with restrictions on the way the account is run, such as meeting a certain minimum number of deposits or withdrawals

Can still be taxed

Interest earned on the principal in your kids’ savings account can still be taxed if it reaches a certain threshold, meaning a tax return will need to be submitted for them. There isn't really such a thing as a tax-free account.

Interest rate may not last forever

Often when you find a great interest rate on a kids’ savings account, it will come with a condition that this will eventually revert to a more standard rate

Top tips for what you can teach your child about saving with an account

How to be responsible and budget

Providing your child with a facility to house their money can give them a practical demonstration of how it can be beneficial to save up for a larger purchase rather than spend more frequently on smaller things.

How to set financial goals

This goes hand in hand with budgeting, as a kids’ savings account can be the perfect way to explain the process between setting a goal and subsequently tracking its progress to show how to achieve it. This can be anything from a new toy to a bicycle, so you can coach your child along the way until they reach the finish line.

How the economy works

Many people in the working world aren’t 100% sure about the complicated machinations of the Australian economy, but you can start to build a base level of understanding for your child. They can see in real time how market factors and events can impact the economy in the form of their interest rate’s fluctuation.

Common kids’ savings account queries

Can I open a kids’ savings account for my baby?

Yes – as soon as they have a birth certificate, you’ll be able to open a kids’ savings account for your baby.

Will I be able to keep my savings in my son or daughter’s kids’ savings account?

No – storing your savings or other funds in a kids’ savings account is prevented by law and will land you in hot water if not declared properly.

Should I give my child a prepaid card instead of a kids’ savings account?

A prepaid card, alongside a kids’ transaction account, shouldn’t be taken out in place of a kids’ savings account if your intent is to grow their savings and restrict their overall access. A prepaid card will only fulfil the need for accessible funds for your child, although they can be an effective way of managing their spending.

Is it best to stick with my current kids’ savings account?

Not without comparing other options on the market, no – interest rates and conditions are prone to change with these accounts, so you should always keep an eye out for better deals on offer.

How can I help my child reach monthly requirements on their kids’ savings account?

One thing you can do is set up an automatic deposit into their account each month to ensure that requirements are met. You should also always keep track of the number of deposits and transactions month-to-month.

Can I apply for my children’s bank account online?

Yes – the application process is just as straightforward online as it is in person or over the phone, if not more so. Savings accounts aren’t as stringent with their documentation requirements in the application process, generally only needing the identity documents of the account holder (your child) and the parent who’ll oversee the account. Ensure that you do your research before applying, though; there’s nothing worse than opening your account and seeing that you missed out on better deals.

Our savings calculators

Savings calculator

Use our savings calculator to help you calculate how much you could save over a set timeframe based on different deposit sizes and frequencies.

Compound interest calculator

Your savings can put in work for you. Crunch the numbers to see how much interest you could earn on top of your interest by compounding daily, monthly and annually.

Budget planner

It's crucial to have a clear idea of your monthly household budget to see where your money is going and where it could potentially be better spent.

Income annualisation calculator

If you're applying for a loan or need to know what your salary is for your tax return, you can use our annualisation calculator to work out what you'll earn this financial year.

How much to deposit

Setting savings goals is important. With this tool, you can work out how much you'll need to deposit to reach your financial aims over a set timeframe.

How long to save

Just as important as knowing how much to deposit is working out how long it'll take to reach your goals. This savings goal calculator can help you do just that.

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