How does a kids bank account work?

Help your child build their money management skills with a kids’ bank account.

Opening a kids’ bank account is the perfect way to start your child’s journey to financial success, helping them learn about the importance of a dollar and how to earn interest on their savings.

However, it can also be a little confusing to understand whose name the account should be in, who can access the funds in the account, and what happens when your child turns 18. Before you take your son or daughter to your local bank branch to sign up for an account, make sure you know the ins and outs of managing a children’s bank account.

AMP Saver Account

AMP Saver Account

2.55 % p.a.

max rate

2.10 % p.a.

standard variable rate

AMP Saver Account

Introductory rate of 2.55% p.a. for 4 months, reverting to a rate of 2.10% p.a. Available on balances below $5,000,000.

  • Maximum Rate: 2.55% p.a.
  • Standard Variable Rate: 2.10% p.a.
  • Introductory period: 4 months
  • Monthly fees: $0.00
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Search and compare kids bank accounts below

Rates last updated February 21st, 2019
Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Interest Earned Product Description
AMP Saver Account
$0 / $0
Introductory rate of 2.55% p.a. for 4 months, reverting to a rate of 2.10% p.a. with no withdrawal or deposit conditions. Available on balances below $5,000,000. This account can be opened on behalf of kids under the age of 18 by a parent or guardian. T&Cs apply.
BCU Scoot's Super Saver
$0 / $0
Ongoing, variable 3.50% p.a. when you deposit $20+ each month and make no more than $5 in withdrawals within the same month.
Available on the entire balance.

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Rates last updated February 21st, 2019
Name Product Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Monthly Account Fee Product Description
NAB Classic Banking
Easily transfer pocket money via Internet banking or the NAB app to allow children to make purchases and obtain cash withdrawals using their debit card. The debit card can be accessed by a child aged 14 or over once a parent or guardian opens the account and gives them joint authority to operate it.
MyState Bank Glide Account
This account can be opened for children under 18. Upon turning 10, the child can be nominated as an account signatory with written consent from the account opener. If your child is over the age of 14, they can open this account themselves in their own name and receive access to a Visa Debit card with a daily withdrawal limit at ATMs, EFTPOS and Bank@Post.
Commonwealth Bank Smart Access
Get unlimited CBA electronic transactions using internet banking, phone banking, ATM and EFTPOS.

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Is the account under my name or theirs?

The name the account is under will vary depending on the age of your child:

  • If the child is under 12, you will either need to be an authorised signatory for the account or open the account in trust for your child. For example, you might want to open a savings account for your newborn.
  • If the child is 12 years or older, the account can be opened in their own name or as a joint account with a parent or guardian.

If I open a bank account for my child, can I use the account?

You can make deposits into your child’s bank account if you wish, but you need to be aware that there are tax implications for doing so. The ATO has very strict laws governing kids’ bank accounts to stop parents hiding their income in a kids’ savings account that pays a high rate of interest. Any income you contribute to your child’s account must be declared on your income tax return.

In addition, whether you or your child is required to declare the interest earned at tax time is dependent not only on who provides the money for the account, but also on who decides how the money is spent. Even if the money is spent on the child, for example to send them to a summer camp, the parent may still have to declare the interest earned on their tax return.

Of course, if you’re the authorised signatory for the account, or it’s a joint account, or has been opened in trust for your child, you will be able to access the funds whenever you wish.

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CUA eSaver Extra

CUA eSaver Extra

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When can my child start accessing the funds in the account?

This depends on the age of your child and the type of account you open. For example, if you’re an authorised signatory on the account, your child won’t be able to withdraw any money without first getting your approval. If the account is being held in trust, your child won’t have access to the funds until they turn 18.

However, if the child is 12 years of age or older and the account is opened in their name, they can start making withdrawals whenever they wish. With this in mind, it may be worth considering how your child handles responsibility, and their money management skills, before deciding which type of account to open and the access conditions that apply.

What happens once my child turns 18?

When your child reaches their 18th birthday, their kids’ bank account will usually automatically convert to a different type of account with the same bank. This could be a savings account or a transaction account, and it will have its own unique terms and conditions.

Some kids’ bank accounts have different cut-off ages, such as 15 or 16 years of age, at which point they will revert to a different product. Read the account terms and conditions closely to make sure you’re aware of what happens when your child reaches the cut-off age. If the funds are automatically rolled over into a new account, is that new account suitable? For example, does it charge a monthly service fee where the previous account didn’t?

Other restrictions

Finally, remember that depending on the type of kids’ bank account you open, there may also be other special conditions that must be met.

For example, if the account offers bonus interest, you may need to deposit a minimum amount each month and not make any withdrawals; failure to meet these conditions could mean that you don’t earn bonus interest for that particular month. The Bankwest Kids Bonus Saver pays interest at 4.75% p.a. when your child deposits between $25 and $250 each month and does not make any withdrawals. If these conditions aren’t met, the standard variable rate of 0.01% p.a. applies for that month.

In other cases, your child’s savings account may automatically convert into a different type of account once the balance reaches a certain level, or you may need to open a linked transaction account.

Again, make sure you are familiar with all the terms and conditions associated with your kids’ bank account to make sure you’re aware of any restrictions that may apply. You can also compare kids’ bank accounts at to see how each individual account stacks up against the competition.

Tim Falk

A writer with a passion for the written word, Tim loves helping Australians compare and find the right products. When he's not chained to a computer, Tim can usually be found exploring the great outdoors.

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