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Kids earning higher interest rates than parents

Kids earning higher interest rates than parents

Banks are paying interest rates of up to 4.75 per cent on children’s savings accounts – although conditions apply.

Bankwest pays a bonus rate of 4.75 per cent on its Kids’ Bonus Saver (see table below), which is available to Australians aged under 15. However, there are two conditions:

  • You must deposit between $25 and $250 per month
  • You must make no withdrawals in the same month

If you fail to meet these conditions, Bankwest will pay only 0.01 per cent interest.

Also, at the end of 12 months, all but $1 is transferred to a linked account, which means that even if you qualify for the bonus rate, it will be calculated on a smaller balance.

The Nexus Mutual Junior Saver account, which is available for under-18s, pays a lower bonus rate (4.35 per cent) than the Bankwest Kids’ Bonus Saver – but the conditions are friendlier:

  • You must deposit at least $2 per month
  • You must make no withdrawals in the same month

If you don’t meet these conditions, you earn the base rate of 3.00 per cent.

At the moment, it is almost impossible for an adult to find an everyday savings account that pays 3.00 per cent interest.

Here is a list of children’s savings accounts with some of the highest interest rates in Australia:

LenderProductBase rateBonus rateHow to get bonus rate
BankwestKids’ Bonus Saver0.01%4.75%Each month, deposit $25 to $250 and make no withdrawals.
Nexus MutualJunior Saver3.00%4.35%Each month, deposit at least $2 and make no more than two withdrawals.
CUAYouth eSaver1.00%4.00%Keep balance under $5,000.
BCUScoot Super Saver0.75%3.50%Each month, deposit at least $20 and withdraw no more than $5.
Endeavour Mutual BankYoung Saver Account2.00%3.50%Keep balance under $5,000.
Credit Union SAChildren’s Savings Account0.25%3.25%Each month, deposit at least 1c and make no withdrawals.
Police BankDynamo0.25%3.00%Deposit at least $5 per week and keep balance above $500.
First Option Credit UnionKids Bonus Saver0.15%3.00%Each month, deposit at least $5 and make no withdrawals. Also, keep balance under $5,000.

Please note that savings accounts that pay the highest interest aren’t necessarily the best savings accounts for each person.

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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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