With children’s saving accounts, kids learn to manage money – and parents, relatives and friends have a place to save for a child they care about.
Get your children into the savings habit
Having their own savings account makes children more money aware and can encourage them to develop good savings habits as grown-ups.
Until your children are old enough to stash away some pocket money or birthday cash gifts themselves, you can save a little for them every month. Set up a standing order to build up a lump sum for them over a few years.
How children’s savings accounts work
Children’s savings accounts are pretty much the same as adult ones and are offered by banks and building societies. There are a few differences, but mostly they’re simple, safe cash accounts that usually pay some interest.
You can open a savings account with just £1 for any child aged up to 18.
Children over seven can manage their savings account themselves – depending on the account, they can take money out and pay it in.
There are also tax-efficient accounts called Junior ISAs – more about them later.
Choosing the right children’s savings account
There are two main types of children’s savings accounts – easy or instant access and regular savings.
Easy and instant access to savings accounts for children
- As the name says – you or your child can withdraw or deposit money at any time.
- Typically, you get a lower rate of interest than with other account types.
Regular savings accounts
- These are designed to encourage regular saving – you have to save money in the account every month, and you might not be able to take it out easily.
- They usually pay a higher rate of interest than instant and easy access accounts.
- With most accounts, if you miss some monthly payments the interest rate might be reduced.
Tax on children’s savings
Do children need to pay tax?
Like adults, children have a Personal Allowance for Income Tax – £12,570 for the tax year 2025/26.
If their annual income (including interest) is below this amount, they won’t have to pay tax on it.
To claim back any tax that shouldn’t have been paid, you should complete Form R40 from HMRC
Tax on money given by parents, friends and family
You can give a child any amount of money, or invest it for them, but if you’re a parent or step-parent there are special rules:
- If you have given your child money that earns over £100 a year in interest, dividends, rent or any other investment income, the interest will be taxed as if it were yours. This doesn’t apply to Junior ISAs or Child Trust Funds.
- This doesn’t apply to anyone else – grandparents and friends can give as much as they like. But there might be tax implications that you’ll want to consider. Giving cash at the wrong time or in the wrong way could end up being chased by the taxman at a later date.
Help with the cost of living
Worrying about money because of rising rents, high energy bills or debt? If so, we’re here to help.
Take the first steps to find your way forward with our guides to help you with the cost of living.
Tax-efficient child savings
Junior ISAs are another option for tax efficiency.
Children can save up to £9,000 for the tax year 2025/26 in their Junior ISA, and none of the interest is taxed.
They can only access the money when they’re 18, and at that point, the money belongs to them.
See Junior ISAs for more information.
Which children’s savings account is best for your child?
Comparison sites are a good starting point for anyone trying to find a savings account tailored to their needs.
It's a good idea to use more than one site as they might show different results. It’s also important to do some research into the type of product and features you need before making a purchase or changing provider.
