Kids Banking

Your guide to encouraging saving

Opening a bank account for your kids not only helps with building savings for when they're old enough to use them, but can go a long way to helping them establish good money habits that continue well into their adult life.

Opening a kids bank account is the perfect way to start your child’s journey to financial success. However, it can be overwhelming trying to understand the details of 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.

What is a kids bank account?

Like all types of bank accounts, kids bank accounts come in many forms including savings accounts, bonus saver accounts and accounts that come linked to a debit card. However, one defining feature of a kids bank account is that it typically earns a higher rate of interest and has low to no monthly account keeping fees. This makes opening a bank account for your child an attractive way to help them build their savings. In addition, some banks have programs specifically designed to help kids learn about money and to encourage them to save.

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High interest savings accounts for kids

Maximise your child's savings with a high interest savings account. Compare the current interest rates, the potential interest earned over 12 months (with a $5,000 deposit) and the conditions that apply.

Account Maximum interest rate Interest earned over 12 months Conditions that apply
Bankwest Children’s Savings Account 2.50% p.a. $264.90* Maximum interest rate applies when account balance is $20,000 or more. Interest rates start at 0.75% p.a. and improve based on account balance.
Bankwest Kids Bonus Saver 4.75% p.a. $505.47* Child must also hold a linked Bankwest Children's Savings Account in his or her name. Maximum interest rate applies each month if no withdrawals are made and deposits total at least $25 - $250.
bcu Scoot Super Saver $372.22 You must deposit at least $20 per month and make no more than $5 in withdrawals within the same month.
Commonwealth Bank Youthsaver $243.53 Maximum rate is paid if you make at least one deposit to the account and have no withdrawals during a calendar month.
St.George Incentive Saver $195.56 Grow your savings by $50 each month, or $0.01 if you're under 21, to earn bonus variable interest. Interest rates shown are for balances up to @sa_product_max_balance,money@ .

*Interest earned on the Bankwest Children’s Savings Account depends on the total account balance, so this number may not be accurate. Similarly, the conditions of the Bankwest Kids Bonus Saver account mean it is not possible to earn this much interest and this number is not accurate.

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Children's banking programs in Australia

There are a host of banking programs available for children in Australia. These programs are designed to educate and engage your child in money-related topics such as saving and budgeting. In addition, each bank offers different rewards and incentives that may be worth considering when looking for a bank account to open for your child.

Program name Features
The CommBank School Banking program Run in participating primary schools across Australia, the program offers incentives to encourage kids to make regular deposits into a CommBank Youthsaver Account. Children receive a token every time they make a deposit and these can be exchanged for a variety of toys and games as rewards. The CommBank School Banking program also features a range of other resources, such as classroom activities, online games and puzzles to teach kids about money and support materials for teachers.
bcu Scoot’s Zone Scoot’s Zone is an online club where children can play a range of interactive games to teach them about saving and managing their money. They can ask money questions, read tips and advice articles, make a savings plan and access special deals and discounts at a number of partner retailers. Membership is available to kids who open a Scoot Super Saver account, a bonus saver account that allows them to earn interest at up to 3.50% p.a.
Hume School Banking Hume Bank’s School Banking program is designed to teach children how to save money. Students who open a Clancy Koala savings account are rewarded with bonus interest when they deposit at least $10 per month and do not make any withdrawals. Students also receive an annual Junior Saver Club activity book and can win a range of prizes each term for saving.
Bendigo Bank School Banking Bendigo Bank runs specific programs to help improve the financial literacy of primary and secondary school students through its local branches. The primary school program is based around the six-week "Get with the Program" financial literacy initiative, which combines fun activities with information and education. The program for senior students provides money management tips, money quizzes, facts and saving advice.
IMB School Banking IMB Bank’s School Banking program offers fun activities and information to help kids learn how to save. Kids can access worksheets, savings tips, interactive games, downloadable activities and colouring-in sheets to help them understand the ins and outs of money management. Students save their money in an IMB Zoo Account designed for kids 12 years and under and get a free gift for every 10 deposits they make. Resources for parents and educational tools for schools are also available online.
The Mutual Bank@School Run across primary and secondary schools, the Bank@School program sees The Mutual visit each school once a week to provide their banking service. Kids can join the Mighty Mutuals Club and learn more about how to save, plus enter colouring and school banking competitions.

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What are the tax implications of opening a kids bank account?

Once your child's bank account starts earning interest, the ATO has specific rules about how the interest earned is taxed. The person who contributes money to the kids bank account and uses the money must include any interest earnings on their tax return.

However, if your child is earning an income and deposits money into their account, the ATO will withhold tax in the following situations:

  • Your child earns more than $120 a year in interest from funds held in their bank account.
  • Your child is younger than 16 and earns more than $120 and less than $420 a year in interest and they have given their Tax File Number (TFN) and date of birth to the account provider.

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