Best children's savings accounts 2024

What are the best children's savings accounts?

You'll often find children's savings accounts have much more generous interest rates than adult accounts - but they can also come with a lot of caveats, so make sure the account works for your circumstances before you commit to opening it.

The age range of children that a bank or building society is willing to accept can also vary, so check whether your child is the right age for the account.

The table below show the best instant-access children's savings accounts available. Providers are fully covered by the Financial Services Compensation Scheme (FSCS) and the accounts are available nationally. It's worth checking the rates paid by smaller building societies in your area to see if they can do any better.

Best children's easy-access savings accounts

If you want your child to be actively involved in managing their own money, an easy-access account is the obvious choice. As the name suggests, you or your child can add and withdraw money at any time.

But what you gain in flexibility you often lose in interest, with rates tending to be variable and lower than those of regular savers and fixed-rate accounts.

Still, these accounts are ideal if your child wants to save their pocket money for a specific treat.

Top-rate account: HSBC My Savings

HSBC offers the market leader for children aged up to 17, with its 5% variable interest.

You can apply to open the account in branch; parents with HSBC current accounts can also open one online.

You can save from £10 for your child, but note that anything over £3,000 will receive 2.25% interest - so you may want to open an additional account with a more competitive rate if you have a larger sum to put away.

*The top-rate account is the highest nationally available interest rate available at last check (3 April 2024).

Best children's regular savings accounts

Regular savings accounts tend to pay the best rates, but access is limited and you are required to pay in money each month.

Most pay a fixed rate of interest so the rate won't change during the term. But if the rate is variable, the lender could move it up or down at any time.

Banks sometimes reduce the interest rate if you miss a monthly payment, but none of the accounts in our table do this.

Top-rate account: Coventry Building Society Young Saver

The Coventry Building Society Young Saver is available through its branches, paying a 12-month variable rate of 5.25% on monthly savings of £1-£200 a month.

This account can only be opened in-branch; however, once you have opening the account you can withdraw money instantly online or in-branch.

*The top-rate account is the highest nationally available interest rate available at last check (3 April 2024).

Best children's fixed-rate savings accounts

Fixed-rate savings accounts, also known as bonds, require you to tie your money up for a specific term, typically between one and five years.

Withdrawals are generally not permitted at all, and providers that do allow you to take money out will charge a penalty.

Usually, the reward for this inflexibility is a higher interest rate - but there are only a handful of fixed-rate accounts for children on the market, and these can currently be beaten by the best easy-access accounts or regular savers.

Equally, some adult fixed-rate accounts are open to savers of any age, so there may be better returns available.

Top-rate account: Saffron Building Society Two Year Fixed Rate Children's Bond

Saffron Building Society offers 4.8% AER for children's savings stashed away for two years.

Your child will need to be aged 15 or under and save between £500 and £25,000 to open one of these bonds.

The account can be opened via post or at one of Saffron Building Society's branches located in Colchester, Bishop Stortford, Brentwood, Royston, Ware, Saffron Walden, Halstead and Haverhill.

Funds can't be added after the account has been opened, and withdrawals or closures are not permitted within the chosen term, unless in exceptional circumstances at the bank's discretion.

*The top-rate account is the highest nationally available interest rate available at last check (3 April 2024).

How do children's savings accounts work?

Children's savings accounts generally work in the same way as adult ones, however, you'll need to check with individual providers to see how each account can be opened and managed.

Usually, a child's parent or legal guardian will need to be with them to open the account, but the child may be able to manage the account themselves as they get older.

Is it better to save in a Junior Isa instead?

You may prefer to make the most of your child's tax-free Junior Isa allowance every year (£9,000 in 2024-25, unchanged from 2023-24).

Isas are an excellent vehicle for keeping savings tax-free in the long term. Junior Isa money is locked away until the child turns 18 - at which point it converts to an adult Isa and the child has full control over the money.

However, in most cases your child won't pay tax on savings anyway, so it makes sense to check rates across the market.

Find out more in our guide to the best Junior cash Isas.

Do children pay tax on savings?

Theoretically yes, however children are entitled to income tax allowances - including the new personal savings allowance - just like adults.

That means, for the 2024-25 tax year, children will only pay tax if they earn more than £18,570 a year - made up of the £12,570 personal allowance, the £5,000 starting rate for savings and the £1,000 personal savings allowance.

One word of warning is that money given by parents and guardians and saved in a non-Isa account is taxable if it generates interest of more than £100 a year (per parent). This won't apply to gifts from other family members.

We explain tax children pay on their savings, and the parents' '£100 rule' in our children and income tax guide.

Are there bank accounts for children?

Current accounts aimed at children are another useful tool for developing money-management skills and can be opened from age 11.

Many also pay interest on any money saved in the account, and come with the option of giving the child a debit card or cash card.

Find out more in our guide to the best children's bank accounts.