Under 16s will need a parent or guardian with them. Fixed-rate savings accounts , also known as bonds, require you to tie your money up for a specific term, typically between one and five years. Withdrawals are generally not permitted at all, and providers that do allow you to take money out will charge a penalty.
Equally, some adult fixed-rate accounts are open to savers of any age, so there may be better returns available. The account can be managed in branch or via post, and funds can't be added after the account has been opened. No withdrawals or closures are permitted within the three-year term.
At the end of three years, the savings and accrued interest will be transferred to an instant-access Maturity Account. Isas are an excellent vehicle for keeping savings tax-free long-term. However, in most cases your child won't pay tax on savings anyway, so it makes sense to check rates across the market.
Find out more in our guide to the best Junior cash Isas. This won't apply to gifts from other family members.
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Limited on behalf of Which? Financial Services Limited. Savings Accounts ISAs. In this article. What are the best children's savings accounts? How do children's savings accounts work? Is it better to save in a Junior Isa instead? Do children pay tax on savings?
Are there bank accounts for children? Regular savings accounts Easy-access savings Fixed-rate savings. More info Rate drops to 0. More info One year fix also available paying 1. Compare savings accounts. See the latest savings deals on Which?
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Find out how much extra interest you can earn if you switch provider. Savings booster. Easy access accounts are a good place to start as they allow you and your child to add and withdraw cash at any time, but you'll get lower rates because the money is always readily available. Once the child turns 18, the Jisa automatically converts into an adult Isa and the child has full control over the money. THE fact that banks have started to offer much better rates on these children's accounts is a good sign that customers might be able to make better gains on their savings soon.
The government has now stopped two schemes that gave money to banks to then help out small businesses. As these schemes have stopped the banks can no longer rely on free money from the government so they will be looking to savers again to make money. To entice savers back they will likely offer much better interest rates than have been seen in recent years. Saving rates are still poor for the moment with Santander offering as little as 0. But interest rates, such as those on kids' accounts, are a good sign that there's hope for savers in the near future.
Savers have had a dismal time of it in recent years - but there are signs that rates are slowly starting to improve. We pay for your stories! Do you have a story for The Sun Online Money team? Email us at money the-sun. Don't forget to join the Sun Money's Facebook group for the latest bargains and money-saving advice.