Best kids savings accounts

What are kids savings accounts?

Kids savings accounts are just like regular savings accounts but are typically simplified to help young savers learn the benefits of saving money.

Most major banks and credit unions in Australia have children’s savings accounts, and Mozo's database compares some of the leading kids savers.

If you’ve just started researching, keep in mind that kids accounts are available for children under the age of 18 years, though there are some youth accounts that go up to 30 years. 

Also, parents or guardians usually have full control over their kid's account until the child turns 16 years of age.

Features to look for in a kids savings account

Features will vary between accounts and savings account providers, so a thorough comparison is required. Let's look at the main kids savings accounts features below:

• No fees: One of the key advantages of opening a kids savings account is that most banks don't charge a monthly account fee for children.
• Bonus interest rate: Childrens savings accounts generally offer bonus interest rates to encourage little ones to save, but compare carefully as not all kids accounts are competitive. Some banks actually offer lower bonus rates on kids accounts than on their standard savings accounts.
• Non restrictive conditions: The best bank accounts for kids pay competitive ongoing interest rates without restrictive conditions. But unfortunately, many banks require kids to meet monthly deposit or no withdrawal conditions to earn that bonus interest. It's important to read the fine print to decide whether the account will actually suit your child's savings habits.
• Kid-friendly features: Many bank websites have online graphs or other fun tools and games to involve kids in understanding how much they are saving over time.
• Easy access: It's a good idea to check if the account offers facilities such as online banking, phone banking and ATM access. This will make it easier for you to conveniently manage the account and introduce your child to the idea of secure internet banking. Amongst other things, you can teach them the importance of not giving their PINs and passwords to anyone.

Kids account tips and traps to watch

Just as it is with any savings account, there are easy to understand features and those that can trip you up a bit. Let's explore the main ones below.

• Teach your child about how bonus rates work: It can be tempting to go for the highest bonus rate offer, but be sure that your child will be able to meet the account conditions each month as many kids savings accounts pay minimal interest if conditions are not met. 

• Have long-term savings goals: At the end of the day, getting a savings account is all about teaching your child the benefits of long-term savings. If they can't make regular deposits, look for an account that has a good ongoing rate.

• Don’t set and forget: Savings account interest rates are variable so they go up and down depending on the market. The higher the rate the more interest they will earn so it pays to review rates so be sure to review the savings account rates and features regularly with your child to make sure that they are getting the best deal for their circumstances and savings goals. 

2024 Mozo Experts Choice Awards - Best Kids Savings Accounts

Looking for a savings account to give your child a leg-up on their financial future? Each year, Mozo’s experts compare kids savings accounts as part of the Mozo Experts Choice Savings Awards analysis. 

These winning savers were designed specifically with kids and teens in mind, and meet a strict criteria put together by our judges.  Here’s some of the 2024 award-winning kids savings products (current interest rates accurate as at 10/10/2024, T&Cs apply)

Best Young Adult High Interest Savings:

• Westpac Life - 18-29 years old - 5.20% p.a.maximum rate on balances up to $30,000

Best Teen High Interest Savings:

• Bank of Queensland Future Saver Account - 5.50% p.a. maximum rate on balances up to $50,000

• IMB Bank Reward Saver Kick Start Account - 5.25% p.a. maximum rate on balances up to $1,000,000

Best Kids High Interest Savings:

• BankSA Incentive Saver Account - 5.25% p.a. maximum rate on balances up to $250,000