baby-bank-account

Looking for bank account for your newborn?

Information verified correct on December 3rd, 2016

Opening a baby’s bank account might be simpler than you think. Here’s all the information you need.

Opening a bank account in your child’s name is a good idea on many fronts. It can give you an easy way to save towards university expenses, the account may offer bonus interest and it would work in teaching your child about banking early in life. However, not all bank account for babies are the same, so it pays to shop around.

Rates last updated December 3rd, 2016
$
$
months
Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Interest Earned
Bankwest Kids' Bonus Saver
Ongoing, variable 4.75% p.a. when link to a Bankwest Children's Savings Account and you deposit $25+ each month. Available for children under the age of 15.
4.75% 0.01% 4.74% $0 $0 / $0 More
CUA Youth eSaver Account
Ongoing, variable 4.00% p.a. Available on balances up to $5,000.
4.00% 4.00% 0.00% $0 $1 / $1 More
Bankwest Children's Savings Account
Ongoing, variable 2.50% p.a. when you link to Kids’ Bonus Saver from Bankwest. Available on balance $20,000 and over
2.50% 2.50% 0.00% $0 $0 / More
Commonwealth Bank Youthsaver Account
Ongoing, variable 2.30% p.a. when you make at least one deposit with no withdrawals each month. Available on the entire balance.
2.30% 0.01% 2.29% $0 $0 / $0 More
People's Choice Young Saver Account
Ongoing, variable 2.75% p.a. when you deposit $5+ each month and make no withdrawals within the calendar month. Available on the entire balance.
2.75% 1.45% 1.30% $0 $0 / $0 More
Suncorp Kids Savings Account
Ongoing, variable 2.75% p.a. when you deposit $20+ and make only one withdrawal each month. Available on the entire balance.
2.75% 1.50% 1.25% $0 $0 / $0 More
Westpac Reward Saver - Under 12
Ongoing, variable 1.85% p.a. when a deposit of any amount and no withdrawals are made each month. Available on the entire balance.
1.85% 0.01% 1.84% $0 / More
Bendigo Bank PiggySaver Account
Ongoing, variable 1.25% p.a. .Available on the entire balance. Designed for kids under 12.
1.25% 1.25% 0.00% $0 $0 / $1 More
Police  and Nurses Way Cool Saver
Ongoing, variable 1.75% p.a. available on balances up to $4,999.
1.75% 1.75% 0.00% $0 $0 / $0 More

What is a bank account for a baby?

Some banks and credit unions provide accounts especially for children less than 18 years of age. You can open any such account in your baby’s name, provided you and your baby meet some basic eligibility criteria.

A typical baby account provides interest, with some accounts letting you earn bonus interest as well. Baby bank accounts tend not to charge ongoing account keeping fees. However, they may come with some depository requirements along with restrictions on withdrawals.

How do I open a bank account for a newborn?

In Australia, children under 18 years old don’t have the legal right to sign documents such as those required in opening a bank account. The good thing is you, as a parent or legal guardian, can open an account in your baby’s name, with your name listed on it as well. This is because financial institutions require some assurance surrounding the child’s legal responsibility. When your child turns 18, you can get the bank to remove your name from the account permanently.

To open a baby bank account you’ll have to provide details from your child’s birth certificate. You’ll also need to verify your identify, which you can do using a valid identification document such as your driver’s license or passport.

You can check with your existing bank to see if it offers baby bank accounts. If it does, and if you have access to its Internet banking platform, you may be able to apply for the account online. Applying by visiting a branch should be simple and quick as well.

Can I open an account before he or she is born?

Unfortunately, you cannot. To open a baby bank account you’ll have to provide your baby’s birth certificate. You get this document only after your baby is born.

Are there any Government regulations or taxes imposed on baby bank accounts?

One the key regulation that surrounds baby savings accounts is who should declare tax on the interest earned. This essentially depends on who owns and uses funds in the account.

You, as the parent, would own the money if you’ve added funds in the account and spend it as per your liking. In this case, you’ll have to include the interest earned in your income tax return. This is also the case if you open a trust account in your child’s name, where you control its income and expenditure.

The funds in the account can come in the form of pocket-money, birthday presents, Christmas presents and savings from part-time earnings. In this case, if nobody other than the child uses these funds then the interest earned becomes the child’s income. The child does not have to lodge a tax return if his or her only source of income is interest not exceeding $416. If the bank withholds pay as you go (PAYG) tax, the child should file for a refund.

If the Australian Taxation Office (ATO) considers the money deposited in an account to be excessive it may carry out further investigation to establish the source of the funds. In case of a joint account held in multiple names, the division of interest happens equally among all account holders.

How do I choose the best baby bank account in Australia?

When comparing baby bank accounts pay attention to these aspects:

  • Account opening requirements. You’ll have to provide your baby’s birth certificate and you’ll also have to go through a legally required identity verification process. In addition, you may have to make a minimum initial deposit to open the account.
  • Monthly fees and fees for using the account. While savings accounts for babies tend not to charge ongoing account keeping fees they may attract other kinds of fees and charges. With some accounts, you can get fee-free banking provided you meet some depository requirements or maintain a minimum monthly balance. Before you open any baby bank account, review the terms and conditions carefully because these give you a clear indication of all applicable fees and charges.
  • The standard variable interest rate. Interest money in the account earns depends on multiple factors. The financial institution you choose plays an obvious role. While credit unions tend to offer better interest rates than mainstream banks, know that this is not always the case. Some baby bank accounts let account holders earn bonus interest if they make deposits each month and don’t make any withdrawals.
  • Location of branches. The proximity of a branch to where you live is important when it comes to opening a bank account for a child. While online banking might be perfect for adults, banks give children limited access to these platforms. As your child grows older, visiting a branch to make deposits and withdrawals will enter the picture.

Shirley Liu

Shirley is finder.com.au's publisher for banking and investments. She is currently studying a Masters in Commerce (Finance) and is the author of hundreds of articles. She is passionate about helping Aussies make an informed decision, save money and find the best deal for their needs.

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