Babies making bank: 2 in 5 get a head start with saving money

30 January, 2019, Sydney, Australia – Over two in five children (43%) already have their own bank account in their first year of life, new research by Finder, Australia's most visited comparison site, shows.

A survey of 2,013 Australian parents with children 12 and under, reveals three out of four (73%) parents have opened a bank account in their child's name by the time they finish primary school.

Sophie Walsh, money specialist at Finder, said the sooner you start saving the better the head start they'll get.

"Opening a savings account for your newborn is a great way to build up a nest egg for big ticket items further down the track - whether that be education, a first car or a house deposit," she said.

A savings account can also teach your child the value of money from a young age.

"If they can see their pool of money growing it will help them resist the temptation to splurge their pocket money at the canteen in favour of saving up for something more valuable like a new game or toy."

"It would be particularly valuable if you can show your child the benefits of putting away birthday money and help them set some achievable savings goals, plus if it's put into a savings account they'll earn interest on that money which they can't do if it's sitting in a physical piggy bank."

Walsh said there are special savings accounts for kids, but it may be worth looking at regular adult savings accounts too.

"Some banks and credit unions provide accounts especially for children less than 18 years of age. You can open any such account in your child's name, however you will need to go into a physical branch with ID for both you and your child.

"Another way to do this, is to open a regular savings account in your own name, and add your child as a signatory at a later date. This is quick and easier to do as you can sign up online and many adult savings accounts have comparable if not better interest rates," she said.

The research found both genders tend to place equal importance on their child's financial future with fathers (77%) only slightly more likely than mothers (72%) to open a bank account for their child.

Top tips for opening a savings account for your child:

• Look for a high interest savings accounts

“First of all jump online and compare different interest rates. Be aware that some introductory offers or bonus rates have conditions and if they’re not met you may earn a much lower interest rate. You can check finder.com.au/savings-accounts to see who is offering the best deal and the conditions.”

• Withdrawal restrictions

“There can often be restrictions on kids accounts on how they can set up and access that money – parents or guardians may need to set it up in branch and withdraw the money on their child’s behalf. To receive the full bonus rate you may only be able to make a limited number of withdrawals a month, or none at all.”

• Minimum monthly deposits

“Children’s saving accounts tend not to charge ongoing account-keeping fees. However, they may come with some depository requirements so make sure you can commit to these before you sign up.”