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Children’s savings accounts

In a society that’s been loaded up with debt for too long, teaching your kids about putting money away and making it work is a valuable lesson. Children’s savings accounts can also be a tax-efficient way of saving for your child’s future, with the first £7,475 earned in interest being tax-free. Most banks and building societies allow parents to open savings accounts for children under 16, and it’s a great way to get children used to managing money.

Advantages of children’s savings accounts

As well as helping your children understand savings and managing money, starting a children’s savings account could help build a nest-egg for the future, to help with university expenses, a house deposit or a first car. Like many other types of savings account, there are several different types of children’s savings account available:-

High interest children’s savings accounts

The children’s savings accounts with the highest rates of interest tend to be the fixed rate accounts, sometimes known as notice accounts. These are fine if you are content to leave the cash tied up for long periods – and are often suitable for younger children who can’t really spend it anyway! A comparison of children’s savings accounts on this site will give you more information about the best rates available, as well as any incentives like bonuses and free gifts. Freebies are popular with children’s savings accounts, because banks know your child is more likely to be excited by a fancy piggy bank, or free activity day than boring things like interest rates. Just be sure to choose a children’s savings account for the right reasons and not because of the free gift alone.

Compare children’s savings accounts

It’s normally the parents who will do the groundwork when choosing a children’s savings account, but it’s worth getting your child involved in the process of comparing the best savings rates, so they understand how to manage their savings in future. Remember also that parents can stay in control of the cash even if the savings account is in the child’s name – that’s useful if you’re worried they’ll take their cash and buy a new PlayStation! You can use our free service to compare Children’s savings accounts from the UK’s top banks and building societies. We also help you compare all sorts of other savings vehicles from offshore savings to regular savings accounts and everything in between.

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