In this article, we’re sharing everything you need to know about opening a children’s savings account, best account types to consider, and the requirements to open.
This article is part of our free series on establishing relationships with bankers and how to open a bank account, which covers bank accounts for all stages of life and all possible scenarios.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Children’s Savings Account [Best Banks]
- Benefits of Opening a Children’s Savings Account
- How Is a Children’s Savings Account Opened?
- Frequently Asked Questions
- Do You Want Help Opening Bank Accounts?
Children’s Savings Account [Best Banks]
Opening a children’s savings account is best for parents that want to educate their children and help them get a head start on financial freedom. In most cases, parents look for accounts that are low cost, with low minimums, high interest rates, and (where possible) tax optimization.
That said, choosing a bank can be confusing since most major banks offer a range of deposit accounts for children that all seem relatively similar. However, most parents simply choose the account that offers the highest interest. While this isn’t a bad place to start, there are other factors that parents should consider before choosing a bank.
We’ll take a close look at these factors and the specific benefits that parents can unlock for their children in the following sections of the article.
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Benefits of Opening a Children’s Savings Account
Benefits of opening a children’s savings account include early financial education and establishing a base for future financial decisions.
The education benefits include responsible budgeting, understanding compound interest, commitment to savings, and how to access the best regular savings accounts.
A financial base can prepare children for large purchases like paying for university, buying their first home, or other major financial decisions.
Here’s a look at some of the most common benefits that parents reference when opening a children’s savings account.
Benefits of Opening a Children’s Savings Account
- Responsible budgeting
- Commitment to regularly saving
- Learning the mechanics of compound interest
- Tax optimized savings for the future
- Head start on major financial purchases
How Is a Children’s Savings Account Opened?
A children’s savings account is opened following the same process as a regular savings account. However, there are two main differences, (1) the account is opened and controlled by the parent, and (2) both the child and the parent need to provide supporting documentation.
Here is a look at the requirements for opening a children’s account or a student account online. Please note that banks may have different requirements. So, it’s best to confirm the requirements before starting the account opening. However, in general the account opening requirements listed below are consistent across most banks.
Requirements for Opening Children Savings Accounts
- Valid government identification for the child
- Valid government identification for the parent
- Proof of address for the parent
- Proof of employment for the parent
If the parent does not already have an account at the bank, they may also be asked to provide a source of wealth documents, bank reference letters, and residence cards in the case of foreign nationals.
Importantly, if you are a non-resident looking to open a bank account for a non-resident child, you will face a lot of difficulty in most countries. However, there are certain banks that actually cater to non-residents and allow parents to open offshore bank accounts for their children. These banks include major UK banks that operate in most major banking jurisdictions around the world. If you’re interested in learning more, contact us to learn how to get started.
Frequently Asked Questions
Below are four of the most common questions that we receive from people looking into opening a children’s savings account with the best banks. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
Is it Possible to Have Easy Access to a Savings Acceasy-access Child?
Yes, it is possible to open an easy access savings account for your child at certain banks. However, because easy access accounts allow you to withdraw whenever you want, they often have lower interest rates. So, if you are trying to help your child maximize the interest on their savings, you may want to consider accounts with fixed deposit timeframes or a Junior ISA.
What Are Savings Accounts for Kids?
Savings accounts for kids are bank accounts designed to help children learn the fundamentals of financial management. They typically offer higher interest rates than adult accounts and provide parents with an opportunity to educate their children on how to grow their savings over long periods of time. Depending on the account that parents choose, savings accounts for kids can also be tax optimized to allow for even more growth potential until the child reaches a certain age.
Do Children’s Savings Accounts Come with Credit Cards?
No, children’s savings accounts do not come with credit cards. However, many banks do offer debit cards with children’s accounts, which can be accessed, controlled, and monitored by the parents.
Which Bank Is Best for Children’s Savings Accounts in the UK?
The best bank for children’s savings accounts in the UK will depend on your specific objectives. However, if you are optimizing for the highest interest rates, you will want to consider one of the large UK banks. That said, banks generally cap the deposits that earn interest. So, even if a bank offers 4% interest, that may only be up to a few thousand dollars. With this in mind, you may want to consider opening multiple accounts for your child in order to maximize their earning potential.
Do You Want Help Opening Bank Accounts?
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