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Kids' Savings Accounts

Encourage the little ones to save with a kids’ savings account. 

We’ve put together a list of useful articles and some of our most frequently asked questions around saving for a child.

kids’ savings accounts

Account name

Interest

Minimum opening balance

How long the account stays open for

Withdrawals

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Account name

Interest

4.00%
gross/AER fixed.

Interest will be paid after each year.

Minimum opening balance

£10 to £100 a month

How long the account stays open for

1 year. Then the savings and the interest will be moved into the child's Kid's Saver account.

Withdrawals

None, by closure only.

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Account name

Interest

1.45%
AER/1.44% gross on balances from £1 - £5,000.
0.01%
AER/0.01% gross on any excess above £5,000.

Interest is variable and is paid after each month.

Minimum opening balance

£1

How long the account stays open for

Until the child's 16th birthday. Then the account will change to an adult Everyday Saver.

Withdrawals

Unlimited

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Account name

Interest

2.45%
tax free/AER variable.

Interest is paid after each year.

Minimum opening balance

£1

How long the account stays open for

Until the child's 18th birthday. Then the account will change to an adult ISA Saver Variable.

Withdrawals

None, until the child is 18.

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Frequently asked questions

  • A grandparent can open a savings account for their grandchild, in the child’s name, as long as they can provide documentation such as the child’s birth certificate. A grandparent would need to have parental responsibility to open a Junior ISA.

  • You can give away £3,000 completely free of inheritance tax in any one tax year. If you don’t gift the full £3000 allowance in one tax year, you can carry over any leftover allowance to the next tax year - up to a maximum of £6,000.

    You can make small gifts of up to £250 to as many people as you like, but you can’t give any one person over £250 in a tax year. This means you can’t give someone more than one gift of £250 or combine the £250 with another allowance. For example, gifting someone your £3,000 annual allowance plus a smaller gift of £250 isn’t allowed.

  • Children’s accounts, excluding Junior ISAs, are not tax free. It’s a common misconception that children don’t need to pay tax on their savings, but they do – just like adults.

    Children may have a Personal Savings Allowance. The first £1,000 of overall savings income earned by basic rate taxpayers will be free from income tax, the first £500 for higher rate taxpayers, and there is no allowance for additional rate tax payers. Depending on personal circumstances, you may need to pay tax on the interest earned and it will be your responsibility to pay any tax owed to HM Revenue and Customs (HMRC).

    If a parent (including civil partner and step parent) gifts money to their child and the interest from it is more than £100 a year, then that interest counts towards the parent’s personal savings allowance, and may be taxable depending on the parent’s personal circumstances.

    This also applies if the interest on the gift, added to any interest we’ve already paid, makes a gross interest payment of over £100. This £100 threshold applies to each parent individually. All accounts a parent holds for the child (whether or not they are held with the same bank or building society) are taken into account. The £100 rule does not apply to parental contributions to a Junior ISA.

  • Yes you can - it’s never too early to start saving for a little one. You can open a savings account for a baby in your name, knowing that the money you save will be for your child.

  • Yes, you can open a current account for your child. We have accounts tailored for teenagers aged 11-17. To help you decide, take a look at our youth accounts for more details.

Tax treatment depends on individual circumstances and may change in the future.

For a definition of AER, gross and other terms, view our savings glossary.

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