How to open kids and youth high interest savings accounts

Signing your kids up to a high interest savings account can be a great way of getting them started on their saving journey. Not only do they get a good idea about how to manage their money but they also discover the rewards from a high interest rate savings account. 

With savings accounts, children can learn about getting their cash to work for them through interest, the importance of regular saving, and the impact of compound interest over time. Some accounts come with educational resources or interactive tools.

What savings accounts are available for kids & youth?

The line between youth and standard savings accounts can be a bit difficult to find, with some accounts requiring age limits as high as 25 for a youth account. Accounts intended specifically for kids are usually meant to encourage an early habit of saving as well as giving them hands-on experience early on.

What features should a kid's high interest savings account have?

Just as comparing your own savings account options, considering the features your kid's high interest savings account might have is important. Since most savings accounts nowadays tend to be accessed through smartphone apps, providers have been adding more handy features. 

Some of the features you may want to consider include:

Budgeting tools

Budgeting tools can take a lot of different forms, from actual budgets in-app to features that help inform spending habits. These usually come with a transaction account, but a lot of other providers usually bundle these together with their savings accounts.

Easy high interest rate

Getting the highest interest rate possible isn’t always practical for some savers. This is because a lot of high interest rate accounts tend to be bonus rates, meaning that you need to fulfil regular conditions in order to get the required rate. So make sure the account has conditions that are easy to meet or a decent base rate savings account. 

Good age range

Some youth savings accounts have age ranges that extend beyond 18+, so they can be a good way of setting your child up with an account that’ll stick with them for a while. 

What should parents consider before opening a high interest savings account?

If you’re looking to get your child started with a new savings account soon, be sure to consider some of the following steps:

First thing - opening an account

Opening a high interest savings account for your child is pretty straightforward, although it does require some preparation. Usually, you'll need identification for both you and your child, such as birth certificates or passports. It's a good opportunity to involve your child in the process, teaching them about the importance of financial documentation and security.

Tax implications 

There are some tax implications you might want to keep in mind before opening a child's savings account. In Australia, interest earned on children's savings accounts can be subject to tax. 

The Australian Taxation Office (ATO) outlines some tax conditions for kids savings accounts when your child is under the age of 16. 

Access and control

You may want to consider how much access and control you want your child to have over their account. Some savings accounts offer joint access, while others are solely in the child's name. Generally speaking though, parents will tend to act as the trustee of the account.

If you’re ready to go, then check out our kids savings account hub page or our high interest savings account page. Alternatively you can check out some savings account providers in the table below…