Kids' saving accounts review

Kids' accounts are teaching kids some surprising lessons about banking
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01.Teaching kids about money

Kid holding $100 note

Our review of 26 savings accounts designed for children and teenagers assesses the interest rates, fees, withdrawals allowed per month, and age limits.

In this article:

You would think that opening a bank account would be a great way to introduce your kids to the concept of saving and financial literacy. You’d expect banks would make kids’ savings accounts as simple as possible – but our comparison found some very confusing conditions.

  • The good news is that the vast majority of kids’ savings accounts offer good interest rates, close to the rates currently offered by high-interest online savings accounts. 
  • The bad news is that there are complex conditions attached to these good rates. They’re usually only available if you make at least one deposit per month, and the minimum deposits can be more than what your child receives in pocket money. To get the bonus interest with Bankwest’s Kids’ Bonus Saver account, for example, the minimum deposit is $25 per month.
And there’s another nasty sting with these accounts: once your child reaches their savings goal and withdraws their money, they’re often hit with a huge interest rate cut. If they make a withdrawal from the kids’ savings accounts from ANZ, CBA and Westpac, for example, their interest rate for that month drops to a meagre 0.01%.

And it gets worse:

  • CUA charges kids a hefty $20 fee for making a withdrawal in their branch. 
  • Bankwest's savings account may actually teach your kids that banks can’t be trusted: after paying the best interest rate for one year, they sweep all but $1 into a low-interest account paying just one per cent for amounts below $3000.
  • Banks can be greedy is another lesson kids may learn from the coin-counting fees charged by a range of institutions. While the majority of banks and credit unions don’t charge these fees to customers or exclude kids from the piggy bank fees, others don’t make this clear. 
  • Suncorp, for example, has a five per cent coin-counting fee. The bank told us they wouldn’t charge kids this, but we couldn’t find this assurance in any of the public official material (though we were told it’s noted in their internal procedure manual). We don’t think that’s good enough – just imagine your child was charged this fee in error. That would be such huge discouragement for little savers.

On top of this, the ATO pays close attention to kids’ income from interest, and high tax rates apply.

CHOICE verdict 

When it comes to kids’ bank accounts, look beyond the interest rate and make sure the conditions suit you and your child. The two accounts with the highest rates, CUA and Bankwest, both have big disadvantages.

In the end you may be best off with one of the big banks, as they give you the best chance for your child to get a face-to-face banking experience in one of their branches. ANZ, CBA and Westpac all charge no fees for kids (NAB no longer offers a specific children’s account). The Commonwealth Bank also offers an educational school banking program that has been adopted by almost half the primary schools across Australia. 

Online tools for teaching kids about money 

iTunes apps:

See our report on Money apps.


For more information about saving money, see banking.




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