Children’s Savings Accounts

Compare Children’s Savings Options

Children’s savings accounts offer a great way of preparing for your child’s future, building up a nest egg which could be used to help them buy their first home or go to university, helping give them a head start in life.

When it comes to children’s savings accounts interest rates can be higher as plans aim to deliver a return over the long term, while some returns may be tax free.

Children can save and earn interest tax free within their annual allowance, as children normally do not earn over their annual allowance each year. A R85 form can be filled out to ensure tax taken on their own savings is refunded or tax is not taken off at all.

However, when a parent gives savings to a child any interest over £100 a year is treated as the parents income and taxed. This is known as the £100 rule.

There are various choices available for children’s savings, although Child Trust Funds – which were supported with government savings vouchers – are no longer available, a new tax-efficient Junior ISA is now available (launched November 2011).

Other options include savings accounts specifically designed for children and investment plans which aim for long term growth.

NatWest Rooster Money Child's Pre-Paid Bank Account
A head start with money - Kids' prepaid debit card and pocket money app. Teaching them good life lessons for the future
Covered Under the FSCS
Monthly Fee
From zero to £1.99
Santander 1|2|3 Mini Current Account
Interest Rate
3% AER
2.96% gross
Interest Earned Between
£1,500 to 2,000
Minimum Deposit
No minimum
Starling Kite Child's Bank Account
Open a Starling Kite account for your child and they get a pre-paid debit card and you get to keep an eye on their spending all from a single app
Covered Under the FSCS
Monthly Fee
Revolut Junior Bank Account
Designed for kids, controlled by you, teach kids money skills for life
Covered Under the FSCS
Monthly Fee
Varies from zero to £12.99

Alternative Option – Junior ISA’s

On the whole, junior ISAs are quite similar to regular adult ISAs in terms of rules and regulations. Some of these rules include:

  • The current year annual contribution limit for junior ISAs is £9,000 per tax year. This can either be put solely into a junior cash ISA or divided between a junior stocks and shares ISA and a junior cash ISA in whatever proportion you wish.
  • Funds in the account will be owned by the child it is opened for and will be locked in until the child reaches 18.
  • Junior ISAs operate on a similar principle to regular cash ISAs; only one junior ISA can be held by each child at a time, and you can transfer a junior ISA from one provider to another. This is one of the key differences between an adult ISA and a junior ISA. You can also switch a junior ISA from a cash ISA to a stocks and shares ISA, and vice versa, something which is not permitted under the current rules for adult ISAs.
  • Unlike Child Trust Funds, junior ISAs don’t include any contribution from the Government.

Advantages of junior ISAs

  • The money saved in a junior ISA stays tax-free once the child reaches the age of 18.
  • The money is locked away until the child turns 18 which could help prevent it being wasted on non-essentials.
  • Contributions are very flexible – you can save as much or as little as you want (up to the current annual allowance of £9,000), as regularly or infrequently as you want.
  • Anyone can put money into a junior ISA on a child’s behalf – so friends and relatives can contribute if they wish to do so.
  • Junior ISAs will now accept transfers from Child Trust Funds but you’ll need to check with the Junior ISA provider first

Limitations of junior ISAs

  • Once your child reaches 18, the money is theirs to spend or save as they wish – if you are concerned that they will waste it, it may be better to set up a savings account in your own name.
  • The current junior ISA subscription limit is £9,000 per year. If you want to save more for your child during the tax year, you may need to open further savings accounts to do so. Remember that only one junior ISA is allowed per child, per tax year.
  • A junior ISA may not always provide any additional advantages over a regular savings account as most children have an annual income that falls below the annual income tax threshold. They can therefore earn tax-free interest on money set aside for them in any savings plan.
Invest from
Investment Options

Simple, transparent – Invest in one of a range of expertly designed portfolios depending on your investment style. No exit fees and you’re free to make adjustments. You can see where your Junior ISA is invested and how it’s performing


Online Valuations
Good to know: All four Nutmeg investment styles are built by experts and use exchange traded funds to diversify across stocks, bonds, industries, even countries. Choose the one that works for you. Capital at risk. Tax treatment depends on your individual circumstances and may change in the future.
Regular Savings
From £1 pm
Investment Options

Choose from one of five investment styles based on risk, and a team of experts build your child’s Junior ISA, choosing which investments to buy and managing them on your behalf

Online Valuations
Good to know: You can choose to invest for you child in an Ethical Plan or an Original Plan. Wealthify Junior ISAs contain a range of investments from across the globe matched to the level of risk you choose. Each Junior Stocks & Shares ISA will contain up to 20 investment funds from providers like Blackrock and Vanguard. Wealthify is authorised and regulated by the Financial Conduct Authority (FCA). Your money is looked after by a team of experienced and qualified investment managers. Invest up to £9,000 per year and/or transfer from an existing Junior ISA or Child Trust Fund.
Capital at risk.
Important information: The value of investments can go down as well as up so you may get back less than you invested. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser. Tax treatment depends on individual circumstances and all tax rules may change in the future.
Regular Savings
From £25 pm
Investment Options

FREE Children’s ISA Guide. Choose from over 2,500 unit trusts and OEICs from leading fund managers. Invest from £25 per month or lump sums of £100.

Online Valuations

Good to know: With an HL Junior Stocks and Shares ISA, you can choose investments for your child including UK and overseas shares, Investment trusts, bonds and exchange-traded funds (ETFs). HL have over 1 million clients who trust them for their investments. Capital at risk.

Important information: The value of investments can go down as well as up so you may get back less than you invested. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser. Tax treatment depends on individual circumstances and all tax rules may change in the future.
Regular Savings
From £10 pm
Investment Options

Invests in the Friendly Society’s With Profit Fund

Online Valuations

Good to know:  Shepherds Friendly Society founded in 1826 is owned by members and does not have shareholders. The Shepherds Junior ISA is invested in the Society’s With Profit fund in a manner that means your child’s money is less affected by short-term stock market fluctuations, so will not lose or gain value on a day-to-day basis. Instead, they will aim to add an annual bonus at the end of each year, the value of which will depend on the performance of the fund during that year.  Apply for a Junior ISA and Shepherds will send you a Love2Shop voucher code worth up to £50 when you’ve made your first payment.

Invest From
No Minimum
Investment Options

Choose your own investments, invest with help from an adviser or let the experts take care of it all for you

Online Valuations
Good to know: Junior ISAs work in the same way as adult ISAs. They give children an allowance every year to save money or invest without paying any Income Tax or Capital Gains Tax. This year the annual Junior ISA allowance is £9,000
Regular Savings
From £50 pm
Investment Options

Over 4,000 funds. You can get investment ideas from Fidelity’s experts.

Online Valuations
Good to know: Investment choice from over 140 fund providers, giving you access to 3,000 investment options including investment trusts and ETFs. One low-cost service fee of 0.35%. Great service – from investment guidance on website through to UK-based phones team. PathFinder (investment ideas for your child’s junior ISA), Select 50, Investment Finder – investing tools for beginners to advanced investors. 24/7 access via online Account Management system. Capital at risk.
Important information: The value of investments can go down as well as up so you may get back less than you invested. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser. Tax treatment depends on individual circumstances and all tax rules may change in the future.
Regular Savings
From £10 pm
Investment Options

A selection of eight funds to choose from low to high risk, so you can tailor your child’s investment.

Online Valuations
Good to know: Scottish Friendly funds include a UK Government Bond Fund, A UK Tracker Fund and a UK Actively Managed Fund. When you take out a My Select (Junior ISA) Scottish Friendly will pay £50 into the Junior ISA for your child. Winner of Best Junior ISA Provider at the Investment Life and Pensions Moneyfacts Awards 2019.
When trying to save money for the future, there are several options open to cash savers. Options include instant access savings accounts, easy access savings accounts, notice savings accounts, fixed rate bonds and structured deposit plans.

With interest rates at the time of writing at all time lows many savers are looking for a range of best saving plans. For savers who are prepared to tie up capital for a year or more typically higher rates of interest are available from savings providers.

A fixed rate bond is a way of gaining a fixed rate of higher interest on your savings for a fixed period of time, typically between one and five years. Generally speaking the longer your savings can be locked away, the higher the interest rate you can get on your money. Some providers offer fixed rate bonds within a Cash ISA so you benefit from tax free interest returns.

Providers normally have a minimum subscription age of 18 but some providers offer options to younger savers.

Normally there is a minimum commitment for depositing money into a fixed rate bond – usually around £1,000, but this can be more. This makes bonds unsuitable for those who wish to top up a savings account in small increments, as this is not usually possible beyond the first lump sum, therefore could look into alternative savings and investments plans.

Having a fixed term means that bonds have a maturity date at which time you will be contacted by your savings provider and provided with options on how you wish your money to be returned to you – you may be given options of putting the money into a new account in which case you should always shop around before accepting a savings deal offered by an existing provider as the rate of interest may or may not be competitive.

Product providers do not normally allow you to access your money during the term and if they do there are normally conditions which may involve a loss of interest so ensure you read the small print before you sign up. Some fixed interest providers will allow one withdrawal a year without penalties.

Interest paid on your savings is treated as income and you may have to pay tax on it depending on your circumstances. If you don’t pay tax you can receive interest gross if you complete HMRC tax form R85. Some accounts will pay interest gross and it is up to you to declare any tax owed to the Inland Revenue.

Fixed rate bonds are cash deposit based and you will get back your original deposit plus any interest owed unless the bank or building society gets into serious financial difficulty. In the unlikely event that this happens the Financial Services Compensation Scheme would pay compensation of up to £85,000 per account holder per authorised institution.

The length of time that savers choose to deposit their money depends on personal financial time frames and other budget and savings considerations. If you need rapid access to your cash, bonds are possibly not the best savings option – it might be preferable to look at an alternative savings options or just an instant access savings accounts.

Minimum deposits can vary from £1 to £10,000. Make sure that you are happy to part with that amount of money for a longer period of time! It is worthwhile having a five-year plan of projected expenses – such as mortgages, car purchases, or planning for a family or retirement – to ensure that you will not need access to your fixed rate bonds account.

Withdrawals are either not permitted or restrictions will apply. Read the provider terms and conditions so that you know what you are getting into. Some providers for example will allow one withdrawal during the term without penalties.

The payment of interest can also vary- some offer monthly interest, others quarterly or annually, and some only pay at the end of the agreed term. Choose a product that fits in with your requirements for the best rates of high interest.

Tax is payable on interest accrued unless you are a non tax payer in which case you can receive interest gross if you complete HMRC tax form R85. Alternatively it is often possible to take a Cash ISA fixed rate bond (current cash ISA allowance for 2018/19 is £20,000 per individual) from which interest can be taken tax free.

If you have cash ISAs from previous tax years you may be able to transfer to a new Cash ISA provider offering a fixed rate bond cash ISA deal.

Please note that this information is based on current law and practice which may change at any time.

1. Consider all options – from instant access to fixed rate bonds to instant access options – All have advantages and disadvantages when trying to build a nest egg for the future.

2. Check the market – shop around to find the right savings plan for you. Interest rates are changing all the time and deals come and go on a regular basis.

3. Make sure you find a product that works for you –  The choice of bond is dependent on the amount of money you intend to deposit, the fixed rate, and the length of the fixed rate period. Whether you want the account to be operated on an online account basis, postal basis or telephone basis. These should all be taken into consideration before making your choice. Read the savings provider terms and conditions carefully.

4. Read the fine print – determine when the provider is likely to let you access your money, how much notice is required, and if there are any penalties for requesting access before the bond matures.

5. Some deals require you to have the interest paid into a current account – check the small print.

6. Check the small print on how interest is paid –  If monthly or annually this will be need to be declared if you submit a tax return. If interest is paid on maturity this may be useful for tax planning purposes.

7. Many deals require you to have internet access –  Some are offered on a postal or branch basis – check the small print.

8. Check that your money is covered by the Financial Services Compensation Scheme – they will guarantee £85,000 of savings against institutional failure. Most UK banks should have this cover, but Irish banks that do not have a UK arm may not be covered by the FSCS.

9. Check what happens when your savings product matures – Providers will write to you when your account matures; if you do not respond the provider will often put your savings into a low or no interest holding account until you provide instructions on what you want to do with the money. It is therefore important to diarise the maturity of your bond and have in mind what you want to do with the money.

10. What is the tax treatment if you are a non taxpayer – If you are not a tax payer many providers will pay interest gross on submission of the relevant HMRC tax form.

Important Risk Information: This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future. Different types of investment carry different levels of risk and may not be suitable for all investors. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice. * Details of how the Financial Services Compensation Scheme applies to investment firms can be found at