The best kids savings accounts in August 2022
One of the best things a parent can do for their kids is to give them a head start on their financial futures. There is an immense value in setting them up for a financially secure future by teaching them the ins and outs of saving money at an early age. Not only will they understand money management better, but they might also gain a solid foundation in financial literacy.
Kids’ savings accounts are a smart way to teach children and teens about money and savings habits. For example, putting just $5 a week into a child’s savings account at 2.00% interest for 18 years would create a total of $5,651, with $955 in interest earned. They could use that money when they study abroad while at university or for putting a payment down on a car. The impact of compound interest can be very powerful over time, which is a great lesson for kids to learn from a young age.
Having a great savings account in your corner is a core component of saving and budgeting. But how do you choose an account that might suit you and your child’s saving style? Well, you've come to the right place, and with a bit of guidance from the data experts at Mozo, we aim to get the ball rolling.
Best kids savings accounts August 2022
- Gateway Bank Dollaroo Savings
- The Capricornian Youth Access Account
- Great Southern Bank Youth eSaver
- Australian Unity Kids Saver Account
- Police Bank Dynamo Kids Savings Account
- Westpac Life (18-29 years old)
- Illawarra Credit Union Wildlife Saver
Expert picks: 2022 Mozo Experts Choice Award-winning best kids savings accounts
Pocket Money Saver
Our experts recently crowned the winning savings accounts in our 2022 Mozo Experts Choice Savings Accounts Awards – including the ones for pint-sized savers.
Motivating your kids to get out of bed in the morning can be difficult enough. So getting them pumped up about stashing their money away for a rainy day can seem downright impossible.
Luckily, these options make saving easy, as you (and your kids) won’t have to do anything to earn interest except plonk their pocket money in the account.
Great Southern Bank Youth eSaver
- 3.25% p.a. interest rate (under $5,000)
- No ongoing account fees
- Unlimited free withdrawals
Why it won: If you’re looking for a competitive interest rate on a kids’ savings account, you’d be hard-pressed to find one better than the 3.25% p.a. offered by Great Southern Bank's Youth eSaver. This account is only for children up to 17 years old, and it comes with no fees. However, keep in mind that if you have over $5,000 in the account, the interest rate will drop to 1.00%. The account comes with no monthly service fee, and there is no limit on withdrawals or phone and online transactions.
Gateway Bank Dollaroo Savings
- Competitive interest rate of 1.50% p.a.
- No minimum balance
- No account-keeping fees
Why it won: With no interest-earning conditions, no ATM withdrawal fees and unlimited branch deposits, little Dollaroos under 16 can easily save using this account. The account also has a competitive interest rate of 1.50% p.a.. There isn’t a set minimum balance to start earning interest or a cap, so this is a great option for kids at any saving stage. It’s also good for promoting long-term money goals, as interest is paid half-yearly instead of on the standard monthly schedule.
The Capricornian Youth Access Account
- 1.50% p.a. top rate available to savers with less than $5,000
- Unlimited free transactions
- No monthly service fee
Why it won: With the top rate of 1.50% p.a. available to savers with less than a $5,000 pool of funds, this is a great kick-starter account for kids under 16 years old. For balances over $5000, the rate reverts to 1.00% p.a. for every dollar over that amount. There’s also easy access to the cash, with unlimited free transactions over the phone, online and through in-branch deposits and withdrawals.
Pocket Money Regular Saver
These savings accounts are good options for kids ready to step up their savings game and start working on a healthy piggy bank balance. They come with higher interest rates attached, but the trade-off is that kids will need to meet specific requirements to score it.
One of these savings accounts might be suitable for slightly older kids who understand the value of saving, want to really see their pocket money grow, and are willing to work for it.
Australian Unity Kids Saver Account
- Competitive maximum 2.00% p.a. interest rate
- $5 minimum monthly deposit
- No minimum starting balance
Why it won: If your kiddo is a good organiser and can make a minimum monthly deposit of $5 and no monthly withdrawals, they can earn a tidy 2.00% p.a. on top of their savings up to $20,000. Even if they slip up and forget to make a deposit or accidentally withdraw from the account, they can still earn a solid 1.00% p.a.. They’ll have access to these rates until they’re 14, alongside handy features like unlimited free transactions over the phone and internet and free unlimited withdrawals.
Police Bank Dynamo Kids Savings Account
- 1.30% maximum rate
- No monthly account fees
- Unlimited free transactions from internet and phone banking
Why it won: Looking for an account built to help introduce kids to the idea of regular saving? With a maximum rate of up to 1.30% and no account fees to worry about, the Police Bank Dynamo Kids Savings Account could prove the right match. There are a few different interest rates young savers will be able to earn on their money with the Dynamo account, depending on their balance and the regularity of their deposits. Savers with balances of $0-$49,999.99 can earn a base interest rate of 0.40% on their balances, or a maximum interest rate of 1.30% if they deposit at least $20 and make no withdrawals in the month. Although there are no monthly fees or limits on transactions, keep in mind there is a $2 charge to withdraw any funds over the counter.
Illawarra Credit Union Wildlife Saver
- Maximum 1.70% p.a. interest rate
- $1 minimum balance
- No monthly fees
Why it won: Is your child or teen keen to start earning interest? They can earn 1.70% p.a. in interest when they maintain a deposit minimum of $10 each month and make no withdrawals on balances of up to $3,000. On balances between $3,000 and $25,000, they can earn 0.50% p.a. under the same conditions. The Illawarra Credit Union Wildlife Saver is available to kids under 18, charges no monthly account fee and free online transactions.
Young Adult Savings
At some point, the little angel (or devil) you raised will spread their wings and leave the nest. Whether they move out of home at 18 or stick around for a few extra years, they should set out into the wide world of adulthood with a solid sum of savings (not to mention a great-value savings account!).
The account below requires them to use the savings skills they learned at home to make the most out of their earnings as they leave their teens and take on their 20s.
Westpac Life (18-29 years old)
- Max interest rate of 2.50% p.a.
- No minimum balance
- Unlimited phone and online transactions
Why it won: Designed specifically for younger Aussies, the Westpac Life (18-29 years old) savings account could be what you’ve been looking for, with one of the most generous maximum interest rates at 2.50%, provided you tick the boxes on a few monthly requirements and also have a Westpac Choice bank account (T&Cs apply). To earn the maximum rate, savers will need to grow their balance of under $30,000 and make at least one deposit into the account each month. That’s in addition to making at least five transactions per month with a Westpac Choice debit card. If they don’t grow their balance during the month but still make the minimum of five card transactions, they can earn 1.65% p.a. interest. The account has a base rate of 0.15% when the required conditions of the bonus rate are not met. Savers can access the account in all the usual ways, including over the phone, online and via the Westpac banking app. Just bear in mind that if you do pop into a branch, there’s a $2.50 fee to make a deposit or withdraw money from the account. There is also a $5 monthly fee, but it’s waived if you deposit $2,000 or more each month.
Head over to the Mozo Experts Choice Awards page to check out more savings account winners and find out how we conducted the awards. Or peruse more family savings options using our kids' savings account comparison tool.
Frequently asked questions
What is a kids savings account?
A kids savings account is like a normal savings account but specifically tailored for kids and teenagers. They are held at a bank or financial institution and accrue interest usually at a higher rate than adult savings accounts. A savings account is a reliable and safe option if you want to kickstart your kids savings.
What is the best kids savings account?
It is impossible to select a best kids savings account for everyone, as what is important is to find the best one for you and your child. This depends on what you’re looking to get from your account and how you plan to save. For example, are you hoping to put away a regular amount of money each month? Then an ongoing bonus account, such as a pocket money regular saver, will likely suit your needs best. Are you looking to deposit a little bit into your child or teens’ savings account when you can? You should check out kids savings accounts with good base interest rates under a certain balance. No matter what it is that you prioritise, there are a lot of good kids savings account options. Head to our savings accounts for comparisons and guides.
Do parents manage kids savings accounts?
This depends on the bank account and the age of the child. Some banks and financial institutions give parents custodial access to their children and teens’ savings accounts until the child turns 18, at which point the account usually becomes a regular savings account, and the child has control. Some other accounts allow teens to manage their own accounts starting at age 13 or 14. Be sure to check the specific terms and conditions of your selected account.
What’s the minimum age for a kids savings account?
The specific age requirement depends on the terms and conditions of the savings account. Most banks and financial institutions allow parents to open kids savings accounts for children at birth. Some other accounts are designed for kids starting age 12-14 to manage independently before turning 18. There are also savings accounts designed specifically for young adults. This could be something to consider if you’re aged 18-29 and looking for a reliable savings option.
What are some of the best tips for teaching kids about money?
As a parent, it’s up to you to create a healthy relationship with money for your children. You can build the foundations of responsible financial decision making by showing your kids where money comes from, and explaining the basics of budgeting, smart spending and how to save for a rainy day.
A good place to start is pocket money in exchange for helping with the household chores. For many Australian children, receiving an allowance or pocket money is a rite of passage. It’s often the first time they will get to interact with and make serious choices about money, and money which is actually their own.
While giving your kids the freedom to spend their own money as they please is important, you may also want to encourage saving. You can open a savings account for your child or teen, allowing them to work towards a saving goal. Whether it’s a new game or piece of clothing, helping them set up a goal, showing them how long it will take and how much they’ll need to contribute could be a great lesson.
When should you open a savings account for your child?
Generally speaking, the earlier you start teaching your kid about saving money, the better. That being said, it's never too late.
So, if you're wondering when to open a saving account for your kids, the answer is pretty much now.
There's plenty of kids savings account which offer zero monthly fees, parental control and oversight features, as well as high bonus interest rates which your child can take advantage of.
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