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Children's Accounts

Many banks and building societies offer specific savings accounts for children. These can pay higher rates of interest than traditional savings accounts.

As these savings accounts would suggest, there are age restrictions involved. Most of these have to be closed by age 18 but some go up to age 24.

Some of these children's savings accounts require notice to be given before cash can be withdrawn without loss of interest. Some children's savings accounts may also restrict the number of withdrawals that can be made over a certain time period.

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Access to these children's savings accounts depends on which account you choose. These include via post and branch. Some accounts may come with a passbook or cash card to withdraw funds.

Incentives may also be offered with children's savings accounts, such as gift vouchers, but it is advisable to compare rates of interest as well as free gifts.

Some providers also offer regular savings accounts for children that come with restrictions on the maximum and minimum amounts that can be invested each month. These accounts often give a higher rate of interest than a normal savings account. However, they usually come with a restriction on the number of withdrawals, which if exceeded can mean a dramatic drop in the rate of interest paid or even that the account has to be closed. A certain number of monthly payments also have to be made into these accounts each year to prevent loss of interest or closure. These savings accounts may offer interest on a fixed or variable rate basis.