Best of the Best 2023: Best Children's Savings Accounts

Best Children's Savings Account

Bank: Australian Mutual Bank
Major Bank: Bendigo Bank  
Non-Bank: Newcastle Permanent  

Having a savings account of their own can give children a financial head start and provide unexpected benefits that extend into adulthood.

Finder's latest Parenting Report shows Aussie kids earn an average of $9.80 in weekly pocket money. This can leave them with a reasonable sum of cash to manage, and there are compelling reasons to open a dedicated savings account for youngsters.

Research suggests children are developmentally capable of saving by age five, and having a bank account in their own name provides a practical way to nurture a savings mindset.

The benefits don't end there. A US study found children who learn the basics of money management tend to have more fulfilling relationships as an adult. It may sound like a stretch, but the idea is that by learning sensible money habits at a young age, children will grow into adults who are less likely to experience financial conflict with a life partner - something that can be a driver of relationship breakdown.

The upshot is that a child's savings account can help youngsters develop skills that hold them in good stead for life. The key is to look for an account offering rewarding returns, without regular account fees that can eat into pint-sized savings.

Dennis Teale, general manager, retail banking, says Bendigo Bank's PiggySaver Account is all about teaching kids under 12 how important it is to save, and helping the next generation become good savers.

"We've made the product incredibly convenient for parents to set up, with a minimum opening balance of just $1 and all the functionality you would expect. We also offer a competitive interest rate (1.6% at the time of writing), plus no monthly service fee."

The PiggySaver Account is only available for youngsters under 12, so it doesn't come with card access. Once they turn 12, the account automatically converts to a Bendigo Student Account, where teens can earn interest with the benefit of debit card access.

"Our PiggySaver Account includes some great perks for families, including birthday rewards for kids between four and 10," adds Teale. Children also receive a free money box when opening their account.

Australian Mutual Bank's Young Saver Account pays an impressive 4.25% interest, though the balance is capped at $10,000. For children under 12, the account and membership of Australian Mutual Bank must be held in an adult's name

Among the non-banks, Newcastle Permanent's Smart Saver Under-25s Account pays 2.50%. A few simple conditions apply. Your child will need to grow their balance by $10 each month and make no more than two withdrawals to be eligible for a high rate of interest each month. From 14, children can apply for a debit card.

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