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A kids bank account is a great way to teach your children about money and encourage them to get excited about saving. Some banks offer dedicated youth or children's accounts, while some allow you to open the standard bank account in trust for your child.
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How do kids bank accounts work?
A kids bank account works like a conventional bank account, but with age limits. Kids bank account holders should be under 18 years of age. Some kids bank accounts act like savings accounts and offer bonus interest. These can require you to make minimum deposits each month and not make any withdrawals.
How do I compare kids bank accounts?
Accounts meant for kids can vary in terms of features they come with, so pay attention to the following factors when comparing your options:
- Interest. The standard variable rate that kids savings accounts offer can vary noticeably. Most such accounts let account holders earn bonus interest if they meet certain conditions, and this bonus interest rate varies from one account to the next.
- Bonus interest conditions. Kids who start earning through part-time jobs can benefit by opening accounts that offer bonus interest, provided they meet certain conditions. To earn bonus interest account holders typically have to make deposits regularly, and they should not make any withdrawals.
- Access to funds. This factor plays an important role if your kid needs to access funds in the account from time to time. Access to funds can come via a debit card, phone banking and online banking. Some offer account access via branch banking and Bank@Post outlets, and some allow direct debits and direct credits as well.
- Fees. Kids bank accounts tend not to charge any ongoing account keeping fees. Fees you may have to pay from time to time can include card replacement fees, over-the-counter withdrawal fees, overseas ATM fees and cheque dishonour fees, and these can vary from one bank to another.
- Age requirement. The age requirement of these accounts can vary as well. While some accounts are for those up to 18 years of age, the maximum age in some cases is 15 or 16 years.
- Debit card access. Some kids bank accounts will come with a debit card, but you typically need to be 14 to get a debit card in your own name. If your child is under 14, they might have access to a rediCARD or Handycard instead (these are similar to debit cards, but with limited use for online purchases).
Benefits of a kids bank account
- Interest earning potential. Kids savings accounts let account holders earn interest through standard variable rates, and many even let them earn bonus interest by meeting some basic requirements. Such accounts give kids simple means to make the most of their money.
- No fees and charges. Banks tend not to charge any ongoing account keeping fees for the kids accounts they offer, and they also try to keep other fees and charges low.
- Easy access to funds. The money isn't locked away like a term deposit, so you can instantly access it if you need it.
- Learn about money. Your child can watch their balance grow using the mobile banking app or Internet banking platform.
Examples of kids bank accounts with interest
| Product name | Age limits | Maximum variable rate |
|---|---|---|
| CUA Youth eSaver Account | 10–17 years | 3.25% |
| Bankwest Children's Savings Account | 0–15 years | 0.3% |
| CommBank Youthsaver Account | 0–18 years | 0.95% |
| People's Choice Young Saver Account | 0–18 years | 1.1% |
| Suncorp Kids Savings Account | 0–18 years | 1.00% |
Frequently asked questions
Q. Does a kid under 16 years of age have to provide a tax file number?
No, this is not a requirement, but make sure you get the account marked as an "Under 16 – TFN Exempt" account.
Q. Who pays tax on a kids bank account?
You only need to pay tax on interest earned on your money, and bank accounts don't typically earn any interest. However, if you have a savings account in your child's name you may need to declare this interest on your tax return.
This comes down to who uses the money in the account. If the money in the account is used by the parent (even if it's to buy things for the child, like school books or toys) the interest earned should be declared on the parent's tax return. If the money in the account is deposited and used by the child (e.g. money given as birthday or Christmas gifts), then the interest earned doesn't need to be declared on the parent's tax return.
Q. My kid is less that 12 years old so should I open an account as a trust?
You can open the account by adding yourself as a signatory, which you can later transfer to the child.
Q. Can I use my child’s account to benefit through the tax-free threshold?
Any money you transfer to your kids bank account, you have to declare in your tax return, so taking this route will lead to no benefit on the taxation front.
More guides on Finder
- Bank of Queensland Simple Saver Account
The Bank of Queensland Simple Saver Account offers an ongoing interest rate with no account conditions to meet. Open up to 9 accounts.
- Illawarra Credit Union Term Deposit $25,000+
Earn a special fixed interest rate for terms of 1 or 2 years in length when you invest at least $25,000.
- Great Southern Bank Goal Saver Account (18-24 year olds)
The Great Southern Bank Goal Saver Account has an ongoing bonus rate on balances up to $50,000 for customers aged 18-24.
- Newcastle Permanent Smart Saver Youth Account (under 25s)
The Newcastle Permanent Smart Saver Youth Account has an ongoing bonus rate for customers under 25.
- Bank of Queensland Smart Saver Account (36+ year olds)
The Bank of Queensland Smart Saver Account has an ongoing bonus rate on balances up to $250,000 for customers over 36.
- Bank of Queensland Everyday Account
The Everyday Account has no monthly account keeping fees, spend tracking features and instant payments via PayID.
- Bank of Queensland Future Saver Account (14-35 year olds)
The Bank of Queensland Future Saver Account has a high ongoing bonus rate on balances up to $50,000 for customers under 35.
- Compare Delphi Bank savings accounts
Delphi Bank offers a range of personal banking products for customers in Australia.
- Compare Citi Australia transaction and savings accounts
Citi offers a range of personal banking products for customers in Australia.