What is a kids savings account?
A kids savings account is a deposit account opened for a child, usually operated by a parent or guardian until the child reaches a set age. Many pay an attractive bonus rate designed to encourage regular saving, often on balances up to a cap.
How bonus interest works for children’s accounts
Like adult bonus savers, the high rate is usually conditional, commonly on a monthly deposit plus no withdrawals or a growing balance. The bonus often applies only up to a balance cap, which varies widely between banks, with a lower rate on amounts above it. The conditions decide whether the headline rate applies.
Tax and access considerations
Interest earned on a child’s account can have tax implications, particularly where an adult provides the funds or where unearned income exceeds certain thresholds. A child under 16 does not need to give the bank a tax file number if the account earns less than $420 a year in interest; above that, the bank withholds tax unless a TFN is provided. This is general information, not tax or financial advice. Access is typically controlled by the parent or guardian until the child comes of age. Deposits are protected by the Financial Claims Scheme up to $250,000 per account-holder, per institution.
How kids savings accounts compare
The bonus rate, the balance cap, the monthly conditions and any fees are the figures that separate them. Accounts can be compared side by side, and the full market is on the savings accounts hub.