If you’re thinking about opening a bank account for your baby, there are a few things you should consider before you apply.

Are you hoping to open the account for savings purposes and to earn interest? Are you using this account to instill the concept of saving in their lives from a young age?

The best baby account for you will depend on what you want to use the bank account for, and potentially, which bank you as the parent or guardian are a member of.

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Learn more about bank accounts

What is a baby bank account?

As a parent or guardian, you can open a bank account in your baby’s name.

In fact, some banks and credit unions provide accounts especially for young children. These accounts are built for children by financial institutions to help teach financial literacy from a young age, or attract customers from a young age.

How does a baby bank account work?

Opening a bank account for someone under 18 years old is a great way to help them understand their finances at a young age. This may encourage better savings habits as they get older, and could start them on the path to financial success.

Baby and child accounts are often free of charge, although they may require you, as the parent or guardian, to follow certain rules to receive certain rewards.

These may include:

  • Making regular deposits
  • Providing identity documents
  • Placing restrictions on withdrawals

Opening a baby bank account

As babies and children under 18 can’t legally sign the documents needed to open a bank account, parents and guardians need to open an account for them.

This means that the parent or guardian will need to have their name connected to the account, until the child turns 18, and the parent’s name can be removed.

To open your baby’s bank account, you will need to provide identity documentation for you and your child. These may include the following documents:

  • Your child’s birth certificate
  • Proof of your guardianship (which may be on your child’s birth certificate)
  • Your drivers licence or passport
  • Proof of your physical address

A good place to start when opening your baby’s bank account is to check with your existing bank if it offers bank accounts for children under 18. As an existing member you may be eligible for bonus savings rates or promotional packages and deals.

When you decide on the bank account you want to open, you will need to start the application process. If you have access to internet banking you may be able to apply online for your baby’s account, however you may also be able to open the account in person if your bank has branches available.

What are the tax implications of baby bank accounts?

The Australian Tax Office (ATO) has legislation in place to stop parents gaming the tax system by hiding their money in baby bank accounts.

If you are the provider in your child’s account and you are spending the money when you feel like it, you will be required to declare the interest earned in your income tax return.

If the money in the account genuinely belongs to your child, these rules apply:

  • If your child’s account earns less than $120 interest per year, no tax applies.
  • If your child is under 16 and earns between $120 and $420 in interest per year, and if that child provides their date of birth or tax file number (TFN), then the bank won’t withhold tax and the child won’t have to lodge a tax return. If the date of birth or TFN is not declared, then tax will be withheld at the top rate and the child will need to lodge a tax return to gain a refund.
  • If your child is under 16 and earns $420 or more in interest per year, and if they declare their TFN, the bank will not withhold tax. If no TFN is provided, tax will be held at the top rate and your child will need to provide a tax return to get a refund.
  • If your child is 16 or 17, earns $120 or more in interest per year and provides their TFN, the bank will not withhold tax. If no TFN is provided, tax will be withheld at the top rate and your child will need to lodge a tax return to receive a refund.

The benefits of baby bank accounts for children

One advantage of a baby bank account is that it can be a good way to teach children about saving and budgeting. As cash is used less, and plastic cards become the norm, teaching your children about money could help them achieve a more stable future.

Learning to budget is not just about teaching kids to put some money away; it also teaches them about spending needs and saving goals. Financial literacy is not always taught in school, so it's important as a parent to help your children becoming financially aware from a young age.

A baby bank account can also help your child understand more about the economy. An interest-bearing account will educate your children about interest rates, inflation, the economy and even the impact of the wider world economy.

Finally, baby bank accounts can educate children about how linked accounts work. If the baby bank account is linked to your own transaction account, your child will gain an insight into making transfers between accounts.

What to look out for with baby bank accounts

The funds in a baby’s bank account are covered by the Australian government’s Financial Claims Scheme, which guarantees deposits of up to $250,000.

If you decide to save your own money in your child’s baby bank account, even if you’re using that money to buy things for your child, you may face problems with the Australian Taxation Office (ATO).

  • They are specifically designed for children under 18 only. As such, parents and guardians must resist the temptation to hide their own savings in their child’s account. The ATO has strict rules regarding funds held in baby bank accounts. If you break these rules, fines or penalties may apply.
  • They often place limits on the number of withdrawals you can make. As your child gets older, be careful to let them know about the restrictions that apply to their account, so they do not fall into the trap of making more withdrawals than legally allowed.
  • Higher interest rates for savings may only be for a limited time. The interest rate that compels you to choose one baby bank account over another might be a short-term introductory rate, which then reverts to a lower standard rate.

Frequently asked questions

How do I open a bank account for a child?

There are few better ways for a child to learn about money management than through savings. And there’s a plethora of bank accounts designed specifically for young people and children.

A bank account for a child can be opened online, over the phone or in a branch in a few easy steps. The minimum age a child can open a bank account for themselves usually ranges between 12 and 14.

If the child is too young to open the account, you can do it for them as their legal parent or guardian. 

To do this, you would need to be over 18, have an Australian residential address and currently reside in Australia (or have proof of residency).

You would also need to provide:

  • Identification for yourself and the child
  • Your tax file number (TFN) or TFN exemption

Depending on the bank account, you might be able to choose what level of access the child has to their bank account (online and via the phone).

Can I open bank accounts for my children?

A common question for new parents is, ‘Can I open a bank account for my child?’

The short answer is yes – as a parent you can open a bank account for your child.

Once you’ve compared your options and found a bank account that suits your needs, the process is relatively simple.

As the bank account is for your child, you’ll need to provide some documentation such as proof of ID, including your tax file number.

You will also need a copy of your child’s birth certificate, and in some cases you may also need to sign a guarantee of indemnity.

Depending on the bank and whether you’re an existing customer, you may be able to open a bank account for your child online. However, you may still need to go into a branch to prove your identity.

How do I open a bank account for a baby?

If you’ve just welcome a new baby into the world, congratulations. Opening a bank account for your child can be a wonderful first gift.

Before you can open your child an account, you’ll need to have a birth certificate or passport for your baby.

As the parent or guardian, you’ll also be listed as a joint holder on the account. This means you’ll need to have proof of your identification and address (a driver’s licence, passport, birth certificate or Medicare Card).

Many banks and credit unions offer baby banks accounts. Usually, you can apply online; otherwise you can head into a local branch or office with your documents.

Can you open another account at the same bank?

Yes, you can open another account at the same bank if you already have an account there, but some banks place a limit on how many specific accounts you can open.

Generally, though, it is possible to have more than one everyday account, one personal account and one joint account, or have different types of accounts – such as a transaction account and a savings account.

Keep in mind that some bank accounts come with fees, so you could be charged twice for having two types of the same account at the same bank.

Also, if you have more than one high-interest transaction account at the same bank, only one account will be able to earn the highest rate of interest.

Opening a bank account for someone under 18

Can foreigners open bank account in Australia?

If you’re migrating, studying or working in Australia, you’ll be pleased to know that you can open an Australian bank account. For the most part, opening a bank account in Australia is a simple process which starts by comparing the types of bank accounts foreigners can open in Australia.

Once you’ve found a bank account that suits your needs, you can start the application process.

When you apply for the account, you’ll need to provide proof of ID which may include your passport, overseas ID or credit card. You may also need to provide a copy of your visa and proof of address in Australia.

Depending on the bank and the type of account you choose, you may be able to apply for the account online or over the phone before you arrive in Australia.

Can you find your bank account number online?

If your bank offers online services, you should be able to find your bank account number online by logging into your account on your bank’s website and checking your details there.

Keep in mind that each type of account you have with a bank comes with a unique account number. This means if you have a bank account as well as a savings account, for example, your bank account number and your savings account number will be different.

If you don’t have access to your bank account online or can’t login, you should be able to find your account number on a mailed bank statement, if you have one.

Alternatively, you can call your bank’s customer service number or visit a branch to retrieve your account number.

Can British expats still open bank accounts?

As a British expat, you can open an Australian bank account, and you can apply for an account the same ways an Aussie would. You can even open an account online from the UK prior to relocating.

If you’re overseas, the bank you choose to open an account with may call you to provide you with our new account details beforehand. You can then have your ID verified within a branch once you’ve arrived.

And if you’re already living down under, the following list outlines the types of information required by most banks when opening an Australian bank account.

  • Australian residential address
  • Tax file number (TFN) or a TFN exemption
  • Identification (this can be your passport)

How do I close a bank account?

Closing a bank account is one of those tasks that’s easy to put in the too-hard basket. There are quite a few steps involved, some which may require you to hang on the phone for a while.  

Here’s a handy checklist of items to tick off, so the job gets done quicker. If you don’t do your banking online, the following steps can also be done at a branch.   

  • Cancel any scheduled or recurring payments
  • Update your direct debit details (such as loan repayments) with creditors
  • Export your payee address book (to keep a record of saved third-party bank account details)
  • Transfer the balance of your account (to the new bank account)
  • Close your account online, or by calling the bank or visiting a branch

Can I have a PayPal account without a bank account?

You don’t need a bank account to send or receive money through PayPal. However, you do need a bank account if you want to withdraw money from your PayPal account.

Can I close my bank account over the phone?

In most cases, you can close a personal or business bank account over the phone. In fact, this is the best way to ensure you’ve closed an account properly.

By speaking to a banking representative, you can capture and close out any pending transactions, or interest owing/payable on the account being closed.

In the instance where the account is a joint account, or you have multiple bank accounts you want to close, your bank may send you a form that you need to fill out and return.

Either way, you would be advised over the phone of the steps you need to take. Calling your bank ahead of closing an account is often a smart course of action.

Can I open a bank account in another country?

Despite having a bad rap for facilitating tax evasion, it is possible and legal to open a bank account in another country, also known as an ‘offshore account’.

Some people choose to open a bank account in another country to invest overseas, for higher interest-earning potential or to access foreign banking services.

The process for opening an offshore bank account differs depending on the financial institution and country in which you’re opening the account.

Typically, you will need to provide identification such as a passport, a local bank statement and a signed declaration proving the source of the money being used to open your account. Usually, deposits into offshore accounts can be made by international money transfer.

How do you set up a bank account online?

Once you’ve compared bank accounts and found the right one, the process of opening a bank account online is quite simple and can be done in around 10 minutes.

To set up a bank account online, you’ll need to prove your identity and provide an approved form of ID as well as your tax file number (TFN).

If you’re a new customer of the bank, you’ll need to verify your identity and potentially upload documents before you can complete your online application.

Once your ID has been verified and you’ve set up your bank account online, you should receive your bank cards in the mail along with your PIN and any other account details.

How do I open a new bank account?

There are a number of ways to open a new bank account – online, over the phone or in the branch. The trick is to decide what type of bank account you want beforehand.

It might sound like a simple enough task, but there are literally hundreds of bank accounts to choose from. And each offer their own banking features and benefits.

A comparison site like RateCity can help you work out what bank account product matches your needs.

Once you’ve made up your mind what you want, it’s advisable to have the following information ready for the application process.

  • A couple of forms of identification (such as driver’s licence, Medicare card, passport)
  • Tax file number
  • Residential address, contact phone number and email (though email is not essential)

How do I open a bank account if I'm under 18?

The good news for savvy young folks like you wanting to take charge of your finances is that there are many bank accounts available for under-18s.

For bank accounts that require you to be 18 or older, you’ll have to rope in a parent or guardian to open the account for you.

Otherwise, you can apply by yourself online or at the branch of the bank, credit union or building society that has the account you would like to open. 

If applying online, you might be asked for a form of identification. For under-18s, this could be a Medicare card you’re listed on, your birth certificate and/or your current home address.

In most cases, you can verify your identity online (at the time of applying) or at the branch afterwards.

How to transfer money to another bank account

Transferring money to another bank is often called a bank transfer, and it can be done a few different ways.

Customers generally need three pieces of information to transfer money to another bank account. Customers need the account name, BSB and account number of the account they wish to transfer money to.

One way of transferring money to another bank account is in a branch with the help of a staff member; they will often give you a receipt as well as confirmation of the transfer.

Transfers can be also made via internet banking and phone banking.

Some banks also allow customers to make transfers via partnered ATMs, especially if the account is with the same bank.

What do you need to open bank accounts?

Opening a bank account is one of the simplest online tasks you could perform. The hard part is deciding which type of bank account you want to open.

All banking institutions have a website where you hit ‘apply’ on the account of your choice and step through an application in less than 10 minutes.

Here’s a list of information that is generally required for applications.

  • Identification (driver’s licence, passport, proof of age card, proof of citizenship and/or birth certificate)
  • Tax file number (so you don’t get charged the highest tax rate)
  • Address, contact email and phone number

If you decide to open a new account at the branch, make sure you ask beforehand what information you need to take with you, or take all of the above to be safe.

How do you delete your bank account from PayPal?

Deleting your bank account from PayPal is a simple three-step process:

  • Go to your Wallet
  • Choose the account you’d like to delete
  • Click ‘Remove bank account’

Do I need to open a business bank account?

Just because you’re in business doesn’t necessarily mean you need a business bank account. You could be a sole trader not registered for GST, and use your personal bank account for business.

If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.

There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.

Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

It’s up to you whether your priority is mainly transactions, or earning the maximum amount of interest on your principal. There’s a business banking solution for you if you need one.

How do you open a bank account in Australia?

Opening a bank account in Australia is usually a straightforward process. Some banks give you the option of opening an account online, while others require you to visit a branch.

Different bank accounts offer different features, so it’s best to compare your options to find one that suits you.

All banks require you to pass an identity check to open a bank account. Australia uses the 100-point identification system, which means you’ll need to show a number of forms of ID that, together, add up to 100 points.

Common ID types include a driver’s licence, passport, Australian visa in a foreign passport, and Australian Medicare card. You’ll find out what types of ID are accepted when you go through the sign-up process online or at a branch.

Once your account is open, you’ll be given or sent a debit card that you can use to make purchases and withdraw money from your account.