Best Kids Savings Accounts in Australia | Children's Savings Guide

Why Opening a Savings Account for Your Child Matters

Opening a savings account for your child is one of the most powerful financial gifts you can give. Beyond simply putting money aside, a kids savings account serves as a hands-on classroom for financial literacy - teaching children the value of money, the habit of saving, and the magic of watching their balance grow over time.

Australia has 46+ banks and financial institutions offering savings products, many of which provide dedicated accounts designed for children and young savers. Starting early gives your child the advantage of time - and when it comes to compound interest, time is the single most important ingredient.

A kids savings account can help your child:

• Develop healthy money habits from a young age
• Understand the relationship between earning, saving, and spending
• Experience compound interest firsthand, reinforcing maths and financial concepts
• Build a nest egg for future goals like education, a car, or travel

Types of Children's Savings Accounts Available

When looking for a junior savings account in Australia, you will typically encounter several types of account structures. The right option depends on your child's age and how much control you want to maintain.

Minor Accounts (Individual Accounts for Children)

These are savings accounts held in the child's name, with a parent or guardian acting as the account operator. The parent manages the account until the child reaches a certain age - this transition age varies by provider, but generally falls between 12 and 16 years old. At that point, many banks allow the child to operate the account independently.

Joint Accounts With a Parent or Guardian

Some families prefer to open a joint account where both the parent and child are named account holders. This approach gives parents full visibility and control while still involving the child in the saving process. Joint accounts can be a good stepping stone before transitioning to an independent account.

Trust Accounts or In-Trust-For Accounts

A trust account is opened by a parent or guardian on behalf of the child. The adult is the trustee and controls the funds until the child reaches adulthood. Trust accounts can be useful for larger sums, such as inheritances or gifts from family members, where you want to ensure the money is used for the child's benefit.

Informal Savings in a Parent's Account

Some parents simply set aside money in their own savings accounts earmarked for their child. While this is the simplest approach, it does not give the child any ownership or hands-on experience with banking, and it may have different tax implications.

Age Requirements and Account Access

One of the most common questions parents ask is: "How old does my child need to be to open a savings account?"

The answer varies by bank and financial institution. Generally speaking:

• From birth: Many providers allow parents to open an account in their child's name from the day they are born. The parent or guardian operates the account on the child's behalf.
• Ages 12–16 (varies by provider): Most banks offer increasing levels of independence as children grow. Some allow children to operate their own account from around 12 years old, while others set the threshold at 14 or 16. This typically includes access to a debit card and online banking.
• Age 18: Full independent access is generally granted when the child turns 18, at which point the account may automatically convert to a standard adult savings account.

Always check with the specific financial institution, as these age thresholds and the features available at each stage differ between providers.

Key Features to Look for in a Kids Savings Account

Not all savings accounts are created equal. When comparing options for your child, prioritise these features:

No Monthly Fees

Children typically hold small balances, so monthly fees can eat into savings quickly. Look for accounts that charge zero monthly account-keeping fees. Most banks waive fees entirely on children's savings accounts.

Competitive Interest Rates

The whole point of a savings account is to grow your child's money. Compare rates across providers - some of the top savings accounts currently offer rates like 5.35% p.a. or 5.40% p.a., though kids-specific accounts may have different rate structures.

No Conditions or Achievable Conditions

Many high-rate savings accounts require conditions like minimum monthly deposits or limited withdrawals. For a child's account, look for options with either no conditions or simple conditions that a young saver can realistically meet - such as making at least one deposit per month (even a small amount from pocket money).

App Access for Teens

As children reach their teenage years, having app access lets them check their balance, track their savings goals, and learn to manage money digitally - an essential skill in today's world. Many banks now offer youth-friendly apps with simplified interfaces.

Educational Tools and Goal-Setting Features

Some providers include built-in tools that help children set savings goals (like saving for a new bike or a school trip) and track their progress visually. These gamification features can make saving engaging and rewarding for young savers.

Easy Deposits for Family Members

Grandparents, aunts, uncles, and family friends often want to contribute to a child's savings - especially for birthdays and holidays. Look for accounts that make it easy for third parties to deposit funds, such as via BSB/account number, PayID, or BPAY.

How Compound Interest Works: A Lesson for Kids (and Parents)

Compound interest is one of the most powerful concepts in finance, and a kids savings account is the perfect way to demonstrate it in real life.

The Simple Explanation

When your money earns interest, that interest gets added to your balance. Then, the next time interest is calculated, it is earned on the original amount plus the interest already earned. In other words, you earn interest on your interest.

An Illustrative Example

Imagine your child saves $10 per week for a year - that is $520 in deposits. With a savings account earning interest, the balance at the end of the year would be slightly more than $520 because interest was earned along the way. Over five or ten years, the effect becomes much more noticeable, as interest compounds on an increasingly larger balance.

The key factors that determine how much compound interest is earned are:

1. The interest rate - higher rates mean faster growth
2. The frequency of compounding - daily compounding grows faster than monthly
3. Time - the longer money stays invested, the more dramatic the compounding effect
4. Regular contributions - consistently adding even small amounts significantly boosts the outcome

This is why starting early matters so much. A child who begins saving at age 5 has a 13-year head start over one who starts at 18 - and those extra years of compounding can make a meaningful difference.

Making It Real for Kids

Help your child visualise compound interest by:

• Drawing a chart showing how their balance grows each month
• Celebrating milestones - their first $100, their first interest payment
• Comparing scenarios - "If you save $5 a week versus $10 a week, here's the difference after a year"
• Letting them see their bank statement and pointing out the interest line item

Tax Implications for Children's Savings

It is important to be aware that income earned by minors - including interest on savings accounts - may be taxed at different rates than adult income. The Australian Taxation Office (ATO) has specific rules governing the income of minors.

Key points to understand:

• Interest is income. Any interest earned on your child's savings account is considered taxable income for tax purposes.
• Different tax rates may apply. Minors may be taxed at different rates on unearned income (such as interest) compared to adults. The specific thresholds and rates are set by the ATO and can change, so always check the current rules.
• A Tax File Number (TFN) matters. While children are not required to lodge a tax return if their income is below certain thresholds, providing a TFN to the bank can prevent withholding tax being deducted from interest payments.
• Seek professional advice. If your child's savings are generating significant interest income, it may be worth consulting a tax professional to understand your obligations.

For the most up-to-date information, visit the ATO's guide on income of minors.

Teaching Kids About Money Using Their Savings Account

A savings account is not just a financial product - it is an educational tool. Here are practical ways to use your child's account to build lifelong money skills:

Ages 3–5: Introduction to Money

• Use a piggy bank alongside the savings account
• Explain that the bank keeps money safe
• Let them hand cash to a teller for deposits (where branches are available)
• Talk about the difference between "wants" and "needs"

Ages 6–9: Building Saving Habits

• Set up a regular deposit from pocket money or chore earnings
• Help them set a savings goal and track progress on a chart
• Show them their bank statement and explain each line
• Introduce the concept of interest: "The bank pays you a little bit for keeping your money there"

Ages 10–13: Understanding Banking

• Let them log into online banking (supervised) to check their balance
• Discuss how savings rates work and why rates differ between banks
• Introduce budgeting: splitting money into save, spend, and give categories
• Explain the difference between savings accounts, everyday accounts, and term deposits

Ages 14–17: Preparing for Independence

• Transition to independent account operation (if the bank allows it at their age)
• Get them a debit card with spending controls
• Teach them to compare financial products - show them how rates like 5.35% p.a. and 5.40% p.a. differ across providers
• Discuss topics like home loan rates and credit cards at a high level to build awareness of the broader financial landscape
• Encourage them to read their bank's terms and conditions

Comparing the Best Savings Rates Right Now

While kids-specific account rates vary, it is worth understanding what the broader savings market looks like. The best savings accounts currently available in Australia include:

Parents can use these rates as a benchmark when evaluating children's savings products. Remember, some of the highest rates require meeting specific conditions each month - so consider whether your child will realistically meet those conditions.

For accounts with no strings attached, check out our no-conditions savings accounts comparison.

When to Transition to an Adult Savings Account

Most banks will automatically convert a children's account to a standard adult account when the account holder turns 18. However, it is worth being proactive about this transition:

• Review the new account terms. An adult account may have different fees, interest rates, or conditions. Do not assume it is the same product.
• Compare alternatives. Turning 18 is a great time to shop around and compare savings accounts across the market.
• Consider their needs. An 18-year-old heading to university, starting an apprenticeship, or entering the workforce may need different banking features - such as an everyday transaction account, a debit card, or even their first credit card.
• Keep the saving habit going. Encourage your young adult to set up automatic transfers into their savings account, even if it is a small amount from their first pay cheque.

Tips for Maximising Your Child's Savings

1. Start as early as possible. The power of compound interest grows exponentially with time.
2. Automate deposits. Set up a recurring transfer - even $5 or $10 per week adds up.
3. Involve the whole family. Share the account details (BSB and account number) with grandparents and relatives for birthday and holiday gifts.
4. Match their contributions. Consider matching whatever your child saves from pocket money or chores - it teaches the concept of employer superannuation matching.
5. Review the account annually. Rates and products change. Compare your child's account to the current best savings accounts once a year to ensure they are getting a competitive deal.
6. Make it visible. Use a chart, app, or spreadsheet to track progress toward savings goals.
7. Celebrate milestones. Acknowledge when they hit $100, $500, or $1,000 - positive reinforcement builds lasting habits.