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Product

Virgin Money Boost Saver (< 18 years)

Real Time Rating™

3.94

/ 5
Maximum rate

1.00%*

% p.a

Base rate

0.05

% p.a

Company
Maximum monthly interest

$13

Total interest earned

$96

Real Time Rating™

3.94

/ 5
Go to site

Deposit $2,000 or more into your Virgin Money Go Account from an external account, and make at least 5 debit card purchases, direct debit or BPAY payments in the previous month.

Product

Dynamo Kids Savings Account S24

Real Time Rating™

4.65

/ 5
Maximum rate

1.70%*

% p.a

Base rate

0.40

% p.a

Company
Maximum monthly interest

$22

Total interest earned

$163

Real Time Rating™

4.65

/ 5
Go to site

Make a minimum deposit of $20 per month with no withdrawals

Product

Dynamo Kids Savings Account s24

Real Time Rating™

4.65

/ 5
Maximum rate

1.70%*

% p.a

Base rate

0.40

% p.a

Company
Maximum monthly interest

$22

Total interest earned

$163

Real Time Rating™

4.65

/ 5
Go to site

Make a minimum deposit of $20 per month with no withdrawals

Product

Kids Saver

Real Time Rating™

4.90

/ 5
Maximum rate

2.00%*

% p.a

Base rate

1.00

% p.a

Company
Maximum monthly interest

$26

Total interest earned

$192

Real Time Rating™

4.90

/ 5
Go to site

when at least $5 per month is deposited and no withdrawals made

Product

Kids Dollaroo Savings

Real Time Rating™

4.51

/ 5
Maximum rate

1.50

% p.a

Base rate

1.50

% p.a

Company
Maximum monthly interest

$19

Total interest earned

$144

Real Time Rating™

4.51

/ 5
Go to site
Product

Ziggy Kids Saver

Real Time Rating™

4.21

/ 5
Maximum rate

1.26%*

% p.a

Base rate

0.01

% p.a

Company
Maximum monthly interest

$16

Total interest earned

$121

Real Time Rating™

4.21

/ 5
Go to site

Make at least 1 deposit and make no withdrawals in the calendar month

Product

Super Saver

Real Time Rating™

4.12

/ 5
Maximum rate

1.09

% p.a

Base rate

1.09

% p.a

Company
Maximum monthly interest

$14

Total interest earned

$104

Real Time Rating™

4.12

/ 5
Go to site
Product

Zoo Account

Real Time Rating™

4.32

/ 5
Maximum rate

1.30%*

% p.a

Base rate

0.10

% p.a

Company
Maximum monthly interest

$17

Total interest earned

$124

Real Time Rating™

4.32

/ 5
Go to site

Deposit at least $10 a month and make no withdrawals

Product

Young Achiever Account S50

Real Time Rating™

4.09

/ 5
Maximum rate

1.10%*

% p.a

Base rate

0.40

% p.a

Company
Maximum monthly interest

$14

Total interest earned

$105

Real Time Rating™

4.09

/ 5
Go to site

Make one deposit and no withdrawals per calendar month

Product

Scoot's Super Saver

Real Time Rating™

4.02

/ 5
Maximum rate

1.00

% p.a

Base rate

1.00

% p.a

Company
Maximum monthly interest

$13

Total interest earned

$96

Real Time Rating™

4.02

/ 5
Go to site
Product

Beans Savings Account

Real Time Rating™

3.94

/ 5
Maximum rate

1.00%*

% p.a

Base rate

0.20

% p.a

Company
Maximum monthly interest

$13

Total interest earned

$96

Real Time Rating™

3.94

/ 5
Go to site

Minimum deposit of $10 per month and no withdrawals per month

Product

Junior Savings

Real Time Rating™

3.94

/ 5
Maximum rate

1.00

% p.a

Base rate

1.00

% p.a

Company
Maximum monthly interest

$13

Total interest earned

$96

Real Time Rating™

3.94

/ 5
Go to site
Product

Mighty Saver

Real Time Rating™

3.94

/ 5
Maximum rate

0.95%*

% p.a

Base rate

0.10

% p.a

Company
Maximum monthly interest

$12

Total interest earned

$91

Real Time Rating™

3.94

/ 5
Go to site

Deposit a minimum of $10 and make no withdrawals during the month

Product

Mighty Saver

Real Time Rating™

3.94

/ 5
Maximum rate

0.95%*

% p.a

Base rate

0.10

% p.a

Company
Maximum monthly interest

$12

Total interest earned

$91

Real Time Rating™

3.94

/ 5
Go to site

Deposit a minimum of $10 and make no withdrawals during the month

Product

Mighty Mutual

Real Time Rating™

3.92

/ 5
Maximum rate

0.90

% p.a

Base rate

0.90

% p.a

Company
Maximum monthly interest

$12

Total interest earned

$86

Real Time Rating™

3.92

/ 5
Go to site
Product

Star Saver

Real Time Rating™

3.75

/ 5
Maximum rate

0.35

% p.a

Base rate

0.35

% p.a

Company
Maximum monthly interest

$9

Total interest earned

$83

Real Time Rating™

3.75

/ 5
Go to site
Product

Young Saver Account

Real Time Rating™

4.00

/ 5
Maximum rate

1.10%*

% p.a

Base rate

0.10

% p.a

Company
Maximum monthly interest

$14

Total interest earned

$105

Real Time Rating™

4.00

/ 5
Go to site

Deposit a minimum of $5 and make no withdrawals during the month

Product

MoneySense

Real Time Rating™

3.69

/ 5
Maximum rate

0.70

% p.a

Base rate

0.70

% p.a

Company
Maximum monthly interest

$9

Total interest earned

$67

Real Time Rating™

3.69

/ 5
Go to site
Product

SuperSaver

Real Time Rating™

3.69

/ 5
Maximum rate

0.70

% p.a

Base rate

0.70

% p.a

Company
Maximum monthly interest

$9

Total interest earned

$67

Real Time Rating™

3.69

/ 5
Go to site
Product

Children's Savings Account

Real Time Rating™

4.00

/ 5
Maximum rate

1.10%*

% p.a

Base rate

0.05

% p.a

Company
Maximum monthly interest

$14

Total interest earned

$105

Real Time Rating™

4.00

/ 5
Go to site

Bonus interest applies each month you make a deposit (of any amount) and no withdrawals

Embed

Learn more about children’s savings accounts

The ability to set practical savings goals and consistently work towards achieving them is an essential skill that you can teach your child from an early age. 

Most parents use piggy banks for kids so they can see the money they're putting away grow into a larger deposit that can be used for purchasing something more significant or special. However, as kids grow, it could help to open a child savings account to introduce them to concepts like banking, savings and interest.

Children’s savings accounts are simple to use and understand. They help to teach children what savings are and the value of growing money. Many lenders provide children (consumers under 18) with savings accounts while also offering competitive interest rates. 

Benefits of savings accounts for children

One benefit of getting kids involved with saving is that they learn how to manage a bank account as the account holder. The more they develop their financial literacy, the easier they’ll find it to understand more complicated products and strategies later in life.

With that in mind, a dedicated savings account can be a good way for children to learn about money, saving and banking. You can choose from hundreds of savings accounts that are specifically offered to kids (consumers under 18) to teach them what savings are and the value of growing money.

How to compare children’s savings accounts

  • Interest rates

Most children or youth savings accounts tend to offer bonus interest rates to encourage children to save. However, that doesn’t mean all kids savings accounts offer competitive interest rates. Bonus interest rates are generally offered on meeting certain criteria, like having a minimum balance or a limited number of withdrawals per month. Check the standard interest the account will earn if the criteria for earning bonus interest is not met. You may be surprised to find this figure lower than the standard interest rate offered on regular savings accounts by some banks.

  • Caps on overall balance

When you compare savings accounts for children, you may find that some providers will advertise very high interest rates. However, watch out for any caps on the overall balance that may prevent you from earning the higher interest rate. For instance, a bank may stop paying you a high interest rate and only pay you the standard variable rate once your total funds exceed a specified limit. You should also watch out for sweeping accounts. Sometimes, banks offer a high interest rate on the primary savings account. However, they will transfer the entire balance into a linked savings account at the end of a set period (usually a year) so that you need to build the savings in the high interest account from scratch. The linked account often earns interest at a lower rate.

  • Access to funds

As your children build their savings, they may want to use it for purchasing things and put money in and out. Therefore, an account with non-restrictive conditions around deposits and withdrawals may be a good choice for them. However, there’s a trap you need to watch out for. When you compare children’s accounts, you’ll find that most of them allow free monthly deposits and withdrawals, including ATM withdrawals and even EFTPOS (electronic funds transfer at point of sales) spending with a debit card. Some may also offer online banking, mobile banking apps or similar smart options. This is also known as a conditional savings account.

But are the free withdrawals really free of cost - it’s something you need to check in the tricky terms and conditions.Look closely and you may find that the high bonus interest is only payable for months in which no withdrawals (or a minimum number of withdrawals) are made. When you read the PDS, you’ll notice that such accounts offer two types of interest rates - a bonus rate when you meet specific conditions and a relatively low base rate of regular interest when you don’t meet the conditions for earning the bonus rate.So, even though the withdrawals are free, you are, in a way, paying to use your own money by earning a lower interest rate on it. Also check for any monthly account fee that may be payable for using a debit card facility or internet banking.

  • Kid-friendly educational resources

Many banks provide kid-friendly educational resources like colourful graphs, interactive videos and games to help children learn the basics of personal finance. While this is not a substitute for what you teach your child at home, such resources can augment their education and make finance fun for kids. As kids' savings accounts are different, it's important to compare the options and work out which one may be the best choice for your child. One quick and simple way to compare children's savings accounts at RateCity is to look at their Real Time Ratings™ - a regularly-updated star rating that looks at the cost and flexibility of different financial products. You must also always read the product disclosure statement (PDS) closely before opening a savings account to avoid getting hit by any hidden fees or charges.

Why open a savings account for your child?

1

Teach kids about income

By storing your kids’ pocket money or chore money into a savings account, you can better help them understand the concept of a salary or income. A piggy bank may feel like a low maintenance approach; however, it prevents them from learning that you can earn regular “wages” in return for labour or services that are transferred into a bank account. You can also print off their bank statement and talk it through with them, teaching them basic money concepts such as account balances, when and how the money comes into the account, and interest.

2

Teach kids about budgeting

A savings account is also a great way to show children how to budget. By storing their pocket money into a kids savings account, they can then choose whether to spend the money now or save it for something bigger. A “save 50 per cent, spend 40 per cent, donate 10 per cent” rule could be a good measurement to help kids understand the concept. Or you can sit with them and help draw up a budget of how they’d like to split their pocket money.

3

Teach kids how to plan for a goal

Whether they want a new toy or a bike, every kid will have something they want to spend their money on. By setting a savings goal, you can help them to develop their patience and get a sense of forward planning. Sit with your child and talk through what their savings goal may be, and how the income they gain through pocket money and simple budgeting will help them to achieve it. If they’re also old enough to understand interest, this is a great opportunity to see it in action.

4

Teach kids about overspending

Everyone makes mistakes, and these are still great lessons to learn, especially at an early age. If your child spends all their pocket money in one go instead of putting it towards their savings goal, they’ll quickly understand they’re even further away from that big-ticket item they want to buy. They may feel disappointed, and you may feel tempted to help them out, but the experience will help them budget better in the future. It’s a lot easier of a habit to break early, before they’re old enough to rack up huge amounts of debt on a credit card.

Questions you might have

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

Should I open multiple savings accounts with UBank?

UBank offers customers an opportunity to make the most of their savings by opening multiple savings accounts. Having multiple savings accounts with UBank may be ideal for savers tracking different goals in separate accounts. 

It’s important to note that to earn bonus interest, you will still need to meet the conditions of the UBank savings account every month. If you don’t make these deposits, you will receive the standard interest rate, which is typically lower. 

Keep in mind that you won’t earn bonus interest on your UBank savings account in the month an account is opened and if you open multiple savings accounts with UBank, you'll start earning any bonus interest the following month. 

It's also not yet known how long the special interest rate will hang around for, so please check with your bank for more information. 

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

Can you have multiple ING savings accounts?

Yes, you can open up to nine accounts with ING at any particular time. If you’re saving money for various goals, such as buying a car or taking a holiday, you can name each of your multiple ING savings accounts differently.

To get a Savings Maximiser account, you’ll need to deposit more than $1000 every month and make at least five additional purchases. If you also want to grow your savings, from 1st March 2021, you can earn up to 1.35 per cent per annum variable interest on one account with a balance of up to $100,000 when you also maintain an Orange Everyday account.

With ING, multiple savings accounts can help keep track of all your savings goals. All the accounts offer flexible withdrawals where you can withdraw as low or as high as you want without impacting your earning interest rate. However, you can only earn the bonus interest on one account. To apply for a Savings Maximiser account, you can visit ingdirect.com.au.

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.

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