We all want the best for our kids, right? Well, one of the most useful things you can do for your children is to set them up for a financially secure future by teaching them the ins and outs of saving money.
And as we all know, a core component of saving and budgeting for the future is having a great savings account on board. But how do you choose one that’s perfect for your kid?
It's easier than you think thanks to the experts at Mozo, who have recently awarded the top savings accounts in the market in our 2020 Mozo Experts Choice Savings Accounts Awards - including the ones for little savers. Check out some of the top winners here:
Set and forget: kids savings accounts with unconditional rates
Motivating your kids to get out of bed in the morning can be difficult enough - trying to get them pumped up about putting their money away for a rainy day can seem downright impossible!
These options make saving easy - you (and your kids) won’t have to do anything to earn interest except plonk their allowance in the account.
1. Sydney Mutual Bank Young Saver Account
Interest rate: 2.75% p.a. (on balances from $0 to $5,000)
Why it’s a winner: If your little one is just getting their savings stash going, then you’ll be pleased to hear that with Sydney Mutual Bank’s Young Saver Account they can snag a high interest rate of 2.75% p.a. on balances up to $5,000! Once they push past the $5,000 mark the annual interest rate will drop to 1.25% for balances up to $10,000, so they may want to go elsewhere for a more competitive rate. But in the meantime, this could be a great place to stash the funds weighing down their piggy bank, until they start saving big. This account is available for tiny tots just learning to walk to teens as old as 17, studying for their HSC. Plus it comes with zero monthly account keeping fees, meaning your child won’t have to worry about any niggling costs eating away at their hard earned savings stash.
2. Coastline Credit Union Cubs Access Account
Interest rate: 2.10% p.a. (on balances up to to $10,000)
Why it’s a winner: With one of the highest unconditional rates around for kids’ savings accounts, it’s no wonder Coastline Credit Union’s Cub Access Account managed to snag a 2020 Mozo Experts Choice Award for best Pocket Money Saver. The credit union’s kids’ savings account comes with an unconditional interest rate of 2.10% p.a. for balances up to $10,000. Plus there are no monthly account keeping fees, so your little cub won’t have to worry about unnecessary costs gnawing away at their savings stash. And if they ever need to deposit or withdraw cash they can do it over the counter.
3. BCU Scoots Super Saver
Interest rate: 2.76% p.a. (on balances up to $50,000)
Why it’s a winner: By sticking their rainy day fund in this account, kids up to the age of 12 can really plump up their balance. It comes with unlimited free phone and internet transactions, unlimited free ATM withdrawals, 6 free branch transactions, and 5 free EFTPOS transactions. All that adds up to make it a great account for disciplined savers who are ready not only to earn a return on their savings pile, but also start managing their own budget.
Level up: Savings accounts for committed kids
These accounts are perfect for kids who are 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 tradeoff is that sprogs will need to meet certain requirements to score it.
One of these 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.
4. Bank of Queensland Fast Track Starter Account (14 to 24 years)
Interest rate: 3.15% p.a. (if $200 or more is credited to the linked Day2Day Plus account and 5 eligible transactions are made by the linked account)
Why it’s a winner: The Fast Track Starter account’s competitive 3.15% annual interest rate is a great incentive for your young teen or university undergrad child to start squirrelling money away for a rainy day. To achieve this high interest rate they’ll have to deposit at least $200 per month into a linked Day2Day Plus account and make five eligible transactions throughout the month. This account might even be more suited to your child if they are slightly older, say a teen who is just starting their first job. It could even be a great way to teach them how to start managing their savings versus their spending.
5. Police Bank Dynamo Kids Savings Account
Interest rate: 2.30% (on balances $500 and above, with a minimum deposit of $20 and no withdrawals in the month)
Why it’s a winner: With a healthy interest rate on offer, this is a great option for young savers, up to the age of 13, who are just getting the hang of being proactive about their money. It’s a great motivator, since they’ll only snag the extra interest by depositing regularly and not taking any of their funds back out. There’s also no monthly fees and free internet and phone transactions, but keep in mind that fees will apply if you want to take your kids into the branch to do their banking.
Work as a team: Savings accounts to open on behalf of your kids
While these accounts may not have won specifically in the kids’ savings accounts category, they still took home a 2020 Mozo Experts Choice Award apiece. Plus as ‘no-strings-attached’ accounts, they won’t require you or your little one to jump through any hoops to get the competitive interest rates on offer.
The only thing to note is that, as they aren’t directly aimed at children, you will most probably have to open an account on behalf of your young one. But that said, it could be a great way for the pair of you to act as a team and save up a stash of dollars for their early life goals! This might particularly be a good option if you’re looking to grow the balance beyond the lower limits put on many dedicated kids accounts.
6. Xinja Xinja Stash
Interest rate: 2.25% p.a. (on balances up to $245,000)
Why it’s a winner: Not only does the Xinja Stash account come with one of the most competitive savings rates in the Mozo database, it’s also pretty much hassle free. There are no account keeping fees, no minimum deposit required to open an account and no conditions to meet to earn the ongoing 2.25% annual interest rate. Plus you can make any number of mobile transactions, meaning your child won’t have to worry about having limited access to their hard earning savings. The only thing to keep in mind is that you will have to have a Xinja Bank Account set up before you can open a linked Xinja Stash Account.
7. Bank of Sydney BOS Saver
Interest rate: 1.65% p.a. (on balances between $5,000 and $5 million)
Why it’s a winner: Bank of Sydney’s BOS Saver is a great place to stow your kid’s hard earned pocket money, without having to jump through any hoops for a decent interest rate. The only thing to note is that your child will have to have at least $5,000 saved up to earn the 1.65% p.a. interest rate. But besides that, there are no conditions or boxes to tick each month. To set up an account you will have to provide an Australian driver’s license or passport and Tax File Number, meaning you’ll probably have to create an account on behalf of your mini saver. Of course that might not be such a bad thing, you could even turn it into a fun bonding experience for the two of you!
So there you have it! Head over to our Mozo Experts Choice Awards section to check out the rest of the kids savings account winners and find out how we conducted the awards. Or if you’d like to peruse the rest of the kids savings account market, take our search tool for a whirl. Just remember to filter the results to see only kids accounts before you start.