02 July 2015

How to choose your child’s first bank account

If you’ve got children, or you’re planning a family, it’s never too soon to start building a nest egg for your kids’ future. Once they’re old enough, you can also encourage them to learn about their finances by having their own account.

But what should you look for in a child’s current account or savings account? Banking has changed so much in recent years that your child’s first bank account will probably be very different to your own – chequebooks and paying in slips have been replaced with cash cards and mobile apps.

Here are some things to consider when opening a children’s bank account.

When do I start saving?

Most banks won’t open children’s current accounts in their own name until they are 11 years old. But if you want to put some money aside for them before that, there are lots of options available, from putting away money in an account in your own name, to buying assets you think will appreciate in value by their 18th birthday or you can open a Junior ISA from birth.

What to look for:

  • Flexibility: Some savings accounts require you to pay in a set amount each month or only allow limited withdrawals, while others offer complete control of when you can put in, and take out, money.
  • Access: Check who can make withdrawals and when. Some accounts lock money away for set periods. And Junior ISAs can’t be accessed until your child turns 18, and then only they can make withdrawals.
  • Interest: Accounts which offer limited withdrawals or lock money away for a fixed term may offer higher interest rates, but this isn’t always the case. Remember, with a Junior ISA, any interest earned is free from tax.

Nationwide offers a range of children’s savings accounts including a Junior ISA. See what’s available.

Things to consider when opening a children’s current account

  • Fees and charges: Check the account doesn’t have an opening fee or any monthly charges associated with it which will eat into your offspring’s pocket money.
  • Ease of use: The prospect of having their own bank account and control of their cash can be scary for younger children, so it’s important to choose an account which is straightforward and easy to use.
  • Access: Can the account be accessed via mobile and internet banking? Does it offer text alerts? These are common features of many adult current accounts so it can be helpful for kids to get used to them from a young age.
  • Debit or cash card? Cash cards can only make cash withdrawals, while debit cards can be used to make purchases in shops and online.
  • Perks: lots of children’s accounts come with added incentives such as cinema discounts, vouchers or a free piggy bank.
  • Interest rate: An account which offers interest can help kids grow their money and encourage saving.
  • Does it come with access to a savings account? If you want your kids to get into the savings habit as soon as possible, why not chose a current account that also gives access to a savings account? Nationwide’s FlexOne current account is for children over 11 and it gives exclusive access to FlexOne Regular Saver.

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