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$1,630 in interest: The top savings accounts for kids

Kids counting money
The highest interest rate savings accounts for children didn’t always deliver the biggest returns once all the fine print was factored in. (Source: Getty)

It’s common for parents to open savings accounts for their children to foster good money habits early.

However, it pays to read the fine print when it comes to choosing savings accounts for kids.

Analysis by found the highest interest rate option actually accrued “barely any interest” once terms and conditions were factored in.

That’s because it was only available for kids aged eight and over and on balances of $1,000 or less.


The research tested several different savings options based on opening an account for a child on their first birthday and then depositing $20 a week until they turned 13.

Australian Unity’s Kids Saver account offered the best value, earning a total of $1,630 in interest over the 12 years and leaving the child with $14,150 in savings.

The great Southern Bank’s Youth eSaver offered the second highest returns, earning children $1,495 worth of interest throughout their childhood.

The Dynamo account from Police Bank/Bank of Heritage Isle came in third place, earning $1,369 in interest during the same period.

top savings accounts for kids
The highest earning kids’ savings accounts. (Source: RateCity)

By comparison, the popular YouthSaver account from CBA earned just $344 in interest over this time, with a total of $12,864 saved in the bank by age 13.

“Our research found the kids’ savings accounts with the highest interest rates didn’t necessarily offer the biggest returns, especially over time,” research director, Sally Tindall, said.

“When selecting a kids’ account, read the fine print carefully and make sure you can meet the conditions for the maximum interest rate before signing up,” she said.

Tindall said savings rates were at record lows but savers would start seeing bigger rewards with the Reserve Bank of Australia expected to increase interest rates as early as June.

Tindall offered some tips to help parents find the right savings account for their child:

  • Plan how much you will deposit and withdraw: Start by thinking about how much you or your child are likely to deposit each month. Consider if you might need to make any withdrawals.

  • Compare the top kids’ savings rates: Use a comparison site to look at what’s on offer.

  • Read the fine print: Will your child be able to meet the terms and conditions? If not, try another account.

  • Watch for the rate caps: Be aware that some accounts only pay the max interest rate up to a certain amount.

  • Check if the app and website is easy to use: Read reviews online to help you know if the app/online banking is kid friendly.

  • Stay vigilant: Review your savings account every six months to make sure you’re getting a good rate.

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