Term deposit accounts for kids
You can open a term deposit in your name for your child, or some accounts allow children under 18 to open a term deposit in their name.
Key takeaways
- Most term deposits require you to be 18+ to open the account in your name online.
- Some banks offer term deposit accounts for children as young as 12.
- It will likely be easier to open the account in your name instead (plus you'll have a lot more choice).
Which banks offer term deposits for kids?
Here are a few banks that do offer term deposits for people under 18.
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Finder Score for term deposits
Finder Score assigns Term Deposit products a score out of 10, comparing interest rates and features, to make comparison easier. We assess over 150 products from more than 90 providers, assessing products across different terms to determine an average score per product.
Open a term deposit for your child in your name
Because not many banks allow you to open a term deposit for someone under the age of 18, it might be easiest to open a term deposit in your own name. You can still reserve the money in the account for your child/children.
This will give you much more choice so you can find a better rate, and will require less admin to sort out too.
Want to see more term deposit rates?
See 100+ term deposit rates in our full comparison table instead.
Why open a term deposit account for a child?
Here are the benefits of opening a term deposit account for your child.
- Guaranteed returns. When you invest money in a term deposit account, you'll know exactly how much the balance will grow by the time the deposit matures. A fixed interest rate and set investment term means guaranteed returns for your little one.
- Safe and secure. Deposits of up to $250,000 with Authorised Deposit-taking Institutions are covered by the Australian Government Guarantee, so there is no risk of your child losing their money.
- Stops them spending their savings. If you open a regular savings account or bank account that provides easy access to the funds, you (or your child) may be tempted to dip into it on a regular basis. Locking the funds away in a term deposit ensures that they save their money rather than spend it.
- Learn about saving. A kid’s term deposit is a great way to teach your child about saving money and investing, and how they can build a bigger bank balance without having to lift a finger thanks to the power of interest.
- Save towards a goal. Whether your child has their heart set on a particular toy or a new mobile phone, a term deposit can help them save the money they need to afford their goal.
- No fees. Most term deposit accounts do not charge any ongoing fees, allowing your child’s balance to increase as quickly as possible.
How to compare kid’s term deposits
If you’d like to open a term deposit for your child, consider the following factors when comparing accounts:
Interest rate. This is the most crucial factor when comparing term deposits. Shop around for the account that offers the highest interest rate, remembering that rates vary depending on the term you choose.
Minimum age. If you want the account to be in your child's name, check the minimum age required to open an account.
Deposit requirements. Check the minimum and maximum deposit limits. For example, an account with a minimum deposit of $1,000 may be a much more reasonable choice for your child than an account with a $5,000 minimum.
Terms available. Terms can range from 1 month to 5 years, but not all terms are available from all banks. Look for accounts that offer the term you desire, and remember that interest rates depend on the term you choose.
Maturity. Make sure you and your child know what happens to the money in the account when the deposit matures. Will it be paid into the child’s transaction account, or will it be automatically rolled over into another term deposit?
Reaching 18. Check to see whether the account will be affected in any way by your child reaching 18 years of age. For example, will it have any influence on the interest rate?
I chose a savings account for my daughter
"When my daughter turned 1 my husband and I opened a savings account on her bahalf in our names. I chose to open a savings account rather than a term deposit because it allows us to make regular deposits into the account when she receives money for birthdays, holidays etc.
Term deposits don't allow ongoing, regular deposits into the account so they're better if you already have a lump sum you want to invest."
Want to open a kids savings account instead?
Compare a range of savings accounts for children.
Frequently asked questions
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i want to invest $10,000 for my grandson long term. where should i invest it to get the best rate”
Hi Julie,
Term deposits are available for up to 5 years. You can review some options for long-term deposits here.. Hope this helps!
My 3 kids have term deposits of $10,000 each. From the age of 12 they are allowed to take the money out to do with as they please. I have saved hard to try and help them get ahead. My ex wants to access their money and with kids able to sign by themselves I can’t stop them when term deposit matures. What 12 year old is mature enough to manage that kind of money. They can’t even legally get a job. Who decided that a 12 year old is mature enough to handle this situation?
Hi Sunshine,
Our company finder.com.au is a financial comparison website and general information service designed to help consumers to make a better decision. Please note we do not represent any company we feature on our pages.
Regarding the current situation it would be nice if you can seek a legal assistance to guide you on this matter.
I hope this information has helped.
Cheers,
Harold