Two for oneOnce your child has got into the habit of saving, they could open up a second savings account or Junior ISA. If they receive their allowance monthly, show them how to transfer a small amount between accounts a few days after they receive their allowance (by direct debit if the account allows it).

Savings account

My child’s first8-12

Children can manage their own savings account from the age of seven, so you can instil the savings habit early.

Everyone’s app-yOur children are far more digitally aware than many of us, so some banks have an app for children’s bank accounts. These are very secure, but it is probably best if your child uses it on a home

computer, rather than their mobile phone. Having such easy access to a

statement of how their savings are

building up is a great incentive.

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Savings firstEncourage your child to save first, when they receive their pocket money or allowance,

not later in the week or month. Once they have a bank account,

you could pop in together for them to deposit a small

amount of their pocket money.

“Having a bank account so young worried me, but

our son was excited about the idea.”

Mr J. Bayley

The Virtual Bank teaches young people how banks work – click the link on the homepage at mymoneysense.com

Choosing an account – what to look forInterest rate (AER)The amount of extra money that will be added to your child’s savings every year. Rates can vary between accounts, so bear this in mind if you want to emphasise the rewards of saving.Minimum and maximum accountsSome banks may ask you to pay in a minimum account each month. Something else to look out for: some accounts pay less interest if the balance goes above a certain limit.Age limitsYou can open some accounts for your child when they are born, but they won’t be able to operate the account themselves until age seven. Be aware that some banks automatically convert your child’s account at a certain age – for example to a student account, which may have different terms and conditions.Access to money Some accounts only let children make deposits and withdrawals in branch, which can be a good way to teach them about how banks work. Other accounts for slightly older children offer an ATM card – you should think about striking the right balance between responsibility and security for your child.Free giftsLots of accounts offer fun gifts to get your child interested in saving, and in the case of things like moneyboxes, help them along too. But make sure you look at the terms and conditions as well, and help your child understand that a better interest rate could be worth more than a free toy in the long run.

Savings accountMy child’s first8-12

Top TipYour children learn from

you, even without knowing it, so show them that

you save. Put your loose change in a jar or have

several jars with labels on them, such as: ‘HOLIDAY’,

‘CHRISTMAS’, ‘NEW SHOES’ etc.

Did you know?State Savings offers a Childcare Plus Account that you can have your Child Benefit automatically paid into. After paying in for 12 months, the amount will be invested for five years, and at the end of that period you will earn a 5.5% return, tax-free.

“When my daughter was nearly nine and

had been putting money away in her moneybox

for a while, the time seemed right to open a bank account for her.”

Mrs A. Thomas

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