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Derin Clark

Derin Clark

Online Reporter
Published: 26/11/2019

Parents thinking about opening a children’s savings account are being urged to act quickly as rates on these accounts could start to fall.

At the moment, children’s savings accounts have been largely immune to the rate cuts that have seen savings rates drop across adult ISAs, easy access accounts and bonds. Indeed, research carried out by has found that the average rate on a children’s savings account has risen during the last two years, from 1.22% in November 2017 to 1.51% today.

Saying this, there have been some notable rate drops on children’s accounts this year. For example, Principality Building Society’s Child Learner Earner regular savings account paying 4% was launched in July, but replaced with a new issue earlier this month offering a lower rate, which could indicate that children’s savings accounts could be the next sector to see rates beginning to fall.

The best children’s savings accounts

The Melton Building Society currently tops the children’s savings account chart with its Wild Ones Young Savers offering a rate of 3.00% monthly on an opening deposit of £5. It should be noted that this account is restricted to existing members of five years or more or to those located in Leicestershire, Nottinghamshire, Lincolnshire and Rutland. Nationwide Building Society also offers a highly competitive rate of 3.00% on its Future Saver, however this account also has a number of opening restrictions.

HSBC offers the top rate on an account without any opening restrictions, with its MySavings paying 2.96% monthly on an opening deposit of £10. Two providers offer the next-best rate of 2.25% without any opening restrictions. Buckinghamshire Building Society pays this rate yearly on its JS100, which requires a £100 opening deposit and requires 100 days’ notice before withdrawals. Virgin Money pays 2.25% on both its Young Saver Issue 5 and its Fred the Red Young Saver Issue 2, both of which pay interest yearly and require a minimum opening deposit of £1.

Commenting on the children’s account savings rates, Rachel Springall, finance expert at, said: “Savers are much more likely to see higher rates on children’s savings accounts compared to adult savers and while these don’t tend to change too often, it doesn’t mean that they are immune. In fact, if providers feel that interest rates could fall in future, then they may start to adjust their range now.

“The majority of the children’s savings market are variable rates, and these can change at any moment. Indeed, this year we have already seen some cuts, despite no change to the Bank of England base rate. The Nationwide Building Society Future Saver – which launched in September 2018 – was cut by 0.50% in June 2019 so that existing customers now get 3% and new customers get 2%. Most recently, TSB cut its Young Saver by 0.15% in September 2019 to now pay 0.14% gross for higher deposits of over £20,000, but at a £1,000 deposit it remains at 1.24% gross and has had the 0.25% base rate rise passed on in both 2017 and again in 2018. Savers with the portion of their balance over £10,000 in the Children’s Instant Saver with Barclays Bank would see the rate drop to 0.30% after a new rate tier was introduced in October 2019, whereas deposits below earn 2.00%.

“While the big high street brands make changes, one of the most lucrative offers to be launched elsewhere for children this year was a regular savings account. The Child Learner Earner from Principality Building Society in July paid 4% yearly but was short-lived, as it was withdrawn earlier this month, so parents had to be swift to take advantage. A new issue of this account is available now, but it pays a lower rate of 3%. To be eligible, savers must also open the Adult Learner Earner alongside this account.

“Today, the top regular savings account for children remains the Halifax Kids' Monthly Saver, which pays 4.50% for 12 months, but has a maximum investment amount of £1,200. Parent’s looking purely at standard children’s variable saving accounts will find HSBC’s MySavings pays the top rate of 2.96% gross / 3.00% AER (the portion of the balance over £3,000 earns 0.75%) but it is only available to children aged seven to 17. This is closely followed by Virgin Money at 2.25%, which has no lower age restriction on its Young Saver.

“The market has already felt cuts to regular savings accounts for adults, fixed rate bonds and even seen products pulled from the easy access market – so children’s savings accounts could be next. As there is only a month left until Christmas week, parents may need to compare the top deals now so that they are not left disappointed.”


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