If the account is opened by an adult, the adult will be acting on behalf of the child (as a ‘bare trustee’). Although the account is in the name of the adult, the money in the account is held for and belongs to the child.
Interest is paid on each whole pound in the account.
A passbook will only be issued for accounts opened in branch.
When the child reaches the age of 18 years and 6 months this account will be closed and moved into an instant access savings account.
Interest rate definitions explained:
- AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.
- Gross p.a. is the interest rate without tax deducted.
You may need to pay tax on any interest that exceeds your Personal Savings Allowance. For more information please visit HM Revenue & Customs' (HMRC) website hmrc.gov.uk
The tax information provided is based on our understanding of current law and HMRC's practice, both of which may change.
The interest rate and information in this summary box are effective from 25 May 2018.