Bank accounts for children

Are you thinking about opening a bank account for your child? Here's what you need to know.

Overview

All the major high street banks offer a bank account designed for children. There are slight differences between them, but they essentially all offer the same basic features:

  • a basic savings account
  • no account or withdrawal fees
  • no overdraft or credit facilities
  • free debit or cash cards (at a designated age)
  • online and mobile access (at a designated age)

In shopping around for a bank for your children it is worth bearing in mind that children’s accounts are essentially an additional account for you, but in the child’s name. (You, the parent, are operating an account as trustee for your child and banks generally will require a parent to have an account at the same bank). As a consequence it is often a matter of bringing a birth certificate to your local branch to open an account. To open an account at another bank where the parent is not an account holder, is a more involved process.

Accessibility

Another reason to keep the same family bank is internet accessibility. In many cases children cannot access their accounts online, only in a branch. Children's internet banking is therefore managed by the parents at younger ages, where they are shown as additional accounts when you log in to view your accounts.


Interest

Most bank accounts pay an amount of interest. Some offer higher enticement rates that are only available on balances up to a limit (to stop parents putting their life savings into the child's name). It is worth bearing this in mind if savings are going to be stored in this account.

Also relevant to know is that Children can only earn £100 in interest tax free from money coming from parents or guardians. Anything over this amount and the whole lot will be taxed to the parent or guardian at their tax rate.

Interest on money coming from other sources will be subject to tax if it is over their Personal Allowance will be taxed at the child's marginal tax rate.


Cash or debit cards

All accounts at some point will offer your children a card. A cash card simply allows them to withdraw money from a cash machine or at a bank and usually limits the daily withdrawal amount. A debit card additionally allows them to shop online and instore as well as withdrawing cash. Many debit cards offer Apple or Google pay.

In some cases the cash card will restrict the amount that can be withdrawn to a lower amount that a debit card. Parents should also weigh up the risks of children carrying around cash that could be lost or stolen against developing the habit of spending plastic money.



Barclays

Barclays offers 3 different accounts for the under 18 market, but accounts targeting children really start at age 11.  View details



Halifax

Halifax's offering similarly starts from age 11, but offers a larger £500 daily withdrawal limit. Recall that Halifax are part of the Lloyds Banking Group (see below).  View details


HSBC

HSBC take a slightly different tact with the MyMoney package aimed at 7-17 year olds, consisting of a savings account from the age of 7 and a current account at the age of 11.  View details



Lloyds

Lloyds calls its offering the Under 19s but its really just for 11-18 year olds. The standout benefit from this account comes at the age of 17 where account holders benefit from savings with the AA Driving School.  View details



Monzo

One of the new breed of mobile only banks, but currently only caters for 16y+. No branches, just an app.  View details



Natwest

Natwest's offering in this space is similar to other banks, targeting 11y and up.  View details



Nationwide

Nationwide also ticks all the main boxes in its offering for the under 18s market.   View details


Santander

Santander stands out by offering higher interest rates on successively higher balances, thereby encouraging children to save rather than spend.  View details



TSB

TSB's is the spin off from Lloyds. It pays an attractive rate of interest and like Lloyds offers discounts on driving lessons.  View details





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