Big Bank dummy spit: smaller players deliver bigger returns on kids’ savings accounts
If there’s one thing all Aussie parents aim to do, it’s tell their kids to dream big. But according to recent Mozo research, the big banks don’t feel the same way when it comes to their savings accounts.
The data found that major banks failed to offer competitive rates on kids savings account, while smaller players proved to provide a greater return on pocket money.
We recently held our Mozo Experts Choice Awards for savings accounts and amongst kids accounts, the most competitive offers were:
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But it was CommBank and ANZ who delivered a jaw dropping result, both offering an ongoing bonus rate of 2.30% and 1.71% and a base rate of 0.50% and 0.01%, respectively.
Westpac fared better with its Bump Savings Account, paying a base rate of 1.50% and an ongoing bonus rate of 2.30%.
“Mozo’s research found that when it comes to kids’ bank accounts, it really does pay to shop around. With interest rates varying between 0.50% to 3.50%, the bank you choose could be the difference between blossoming savings for your child, or pitiful growth,” said Mozo Director, Kirsty Lamont.
“The smaller banks like Endeavour Mutual, Greater Bank, Newcastle Permanent and Police Bank offered strong savings rates for children’s savings accounts, beating out the big four.”
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Customer experience was also taken into account as many banks had different terms and conditions in order to qualify for the bonus rate, such as no withdrawals and age restrictions or limits.
Another feature up for debate were the add-ons that came with the account, like debit cards, eftpos access and banking apps.
“It pays to consider what type of banking experience you want your child to have whether that’s learning how to use an app on a smartphone, or whether you’d like them to value the physical experience of depositing their money with a bank teller on a regular basis,” Lamont explained.
“As always, read the fine print and ensure you stick to any account conditions to help ensure that your child’s bank account blossom, enabling your child to have a positive first savings experience and watch their money grow.”
Mozo's top tips for finding the best savings account for your child
- If you know your child won’t make regular deposits, choose a standard account without conditions.
- Keep in mind that some accounts have special rate conditions, like minimum deposit requirements or withdrawal penalties.
- Consider additional features, such as debit cards and savings apps.
If you’re ready to kickstart your child’s financial future, head over to our savings account comparison tool to compare some of current rates on kids savings accounts.