Best savings accounts for children in the UK 2025: High-interest options
Choosing the best savings account for children can secure their financial future by building a nest egg with high-interest returns. In 2025, top options offer up to 5.5% AER (annual equivalent rate, which shows the true return including compounding), making them ideal for parents seeking tax-efficient ways to save for kids under 18. This guide focuses on UK-specific accounts, drawing from expert sources like MoneySavingExpert, to help you compare easy-access, Junior ISAs and regular savers while considering factors like accessibility and protection.
Types of children’s savings accounts
The best savings account for children typically falls into four main types, each suited to different needs: tax-free growth via Junior ISAs, flexible easy-access for emergencies, disciplined regular savers for higher yields, or locked fixed-rate bonds for committed saving. Start with your goals—short-term access or long-term growth—before selecting.
Junior cash ISAs
Junior ISAs (JISAs) are tax-free wrappers for children’s savings, allowing up to £9,000 annual contributions that grow without income tax until age 18. They suit long-term saving, with top rates around 5.5% AER in 2025. Unlike adult ISAs, parents manage them until the child turns 18, when control transfers.
Easy-access accounts
These provide flexibility, letting you withdraw anytime without penalty, ideal for the best savings account for children under 5 who might need funds for education. Current top easy-access rates hit 4.5% AER, protected by the FSCS up to £85,000 per person per institution. They’re great for beginners building habits without lock-ins.
Regular saver accounts
For disciplined saving, regular savers reward monthly deposits (often £25-£200) with rates up to 7.5% AER over 12 months, but early withdrawals incur penalties. They’re a strong choice for the best regular savings account for children, teaching budgeting while maximising interest. Limits apply, so they’re best for steady contributions.
Fixed-rate bonds for kids
These lock funds for 1-5 years at fixed rates (around 4.55% AER), suiting parents confident in not needing access. They’re less flexible but offer guaranteed returns, often through building societies like Clydesdale Bank. Check for child-specific versions to ensure eligibility.
Top high-interest recommendations
The highest-yield children’s accounts in 2025 prioritise AER, minimum deposits and access, with Martin Lewis highlighting tax-free options as key for the best savings account for children UK. Compare based on your child’s age and saving horizon; easy-access for flexibility or JISAs for growth.
Best easy-access options
Leading easy-access accounts include Virgin Money’s Double Take at 4.5% AER (min £1 deposit) and HSBC’s Kids’ Savings at similar rates with app management. These beat standard adult accounts, per MoneySavingExpert’s 2025 guide, and are FSCS-protected.
Highest yield JISAs
Top JISAs from providers like Coventry Building Society offer 5.5% AER tax-free, with no withdrawal until 18. Forbes Advisor UK ranks them highly for the best child savings account UK, emphasising £9,000 limits. They’re ideal for long-term, hands-off saving.
Regular savers up to 7.5%
First Direct’s regular saver hits 7% AER for £25-£300 monthly deposits, adaptable for children via parental accounts. MoneySavingExpert notes up to 7.5% from similar providers, but with 12-month terms. Great for building the best high interest savings account for children through routine.
Accounts for under 5s
For toddlers, NatWest’s Children’s Savings offers 2-3% AER with low mins and parental oversight, focusing on education pots. These avoid complex rules, making them the best savings account for children under 5, as per Which? reviews.
| Account Name | Provider | AER (%) | Min Deposit | Access Type |
|---|---|---|---|---|
| Double Take Kids’ Saver | Virgin Money | 4.5 | £1 | Easy-access |
| Junior Cash ISA | Coventry BS | 5.5 | £1 | Until 18 |
| Regular Saver | First Direct | 7.0 | £25/month | Limited |
| Kids’ Saver | HSBC | 4.0 | £1 | Easy-access |
| Children’s Fixed Bond | Clydesdale Bank | 4.55 | £500 | 1-year fixed |
| Ethical Kids’ Saver | Triodos Bank | 3.5 | £10 | Easy-access |
Note: Rates accurate as of October 2025; check providers for updates. Data from Moneyfacts Compare and Which?.
Tip: Start small with £10 monthly to teach saving habits—Martin Lewis recommends this for the martin lewis best savings account for children, combining education and growth.
Tax and eligibility rules
Children’s savings are generally tax-free up to £100 interest annually from parents’ gifts (parental PSA rule), but JISAs avoid this entirely with £9,000 limits. All accounts require the child to be UK resident under 18; parents open and manage them. FSCS protects up to £85,000, ensuring safety.
Tax-free limits
Via JISAs, save £9,000 yearly tax-free; beyond that, regular accounts use the child’s £1,000 PSA if applicable. Parents’ contributions count toward their £1,000 allowance if over £100 interest. See MoneySavingExpert on child savings tax-free for details.
Parental controls
Parents must apply, providing child’s birth certificate; withdrawals need justification until 16. This ensures funds benefit the child, per FCA rules.
FSCS protection
Every reputable UK account is covered up to £85,000, safeguarding against bank failure. Always verify with the provider.
Age-specific advice
Under 5s suit simple easy-access; teens may access at 16 with permission. Tailor to milestones like school fees.
How to choose and open an account
Compare AER, fees, access and ethics; use tools from MoneySavingExpert for the best savings account interest rates for children. Open online in 10 minutes with ID; transfer existing savings easily.
Comparison factors
- AER vs accessibility: Higher rates often mean less flexibility.
- Min deposits: From £1, suiting all budgets.
- Ethical options: Triodos offers sustainable picks at 3.5% AER.
For broader comparisons, see our best savings account guide or best savings account rates. For UK specifics, check best savings account uk.
Martin Lewis tips
Lewis advises prioritising JISAs for tax-free growth and shopping via comparison sites. Avoid low-rate banks; aim for 4%+ AER.
Steps to open
- Check eligibility (child under 18, UK resident).
- Gather docs: Birth cert, parent’s ID.
- Compare rates on MSE or Which?.
- Apply online/phone; fund via transfer.
- Monitor annually for better deals.
Frequently asked questions
What is the best savings account for a child under 18?
For children under 18, a Junior ISA often ranks as the best savings account for children due to its tax-free status and potential for 5.5% AER growth on up to £9,000 yearly. It locks funds until 18, promoting long-term saving, unlike flexible easy-access accounts which offer 4.5% but no tax shield. Experts like Martin Lewis recommend JISAs for most families, but choose easy-access if you need liquidity for near-term needs such as education costs.
How much interest can a child’s savings account earn?
A child’s savings account can earn up to 7.5% AER in regular savers or 5.5% in top JISAs as of 2025, depending on the type and deposit amount. For example, £1,000 at 5% AER grows to £1,050 in a year, tax-free in a JISA. Rates vary by provider and market conditions, so compare via sites like Moneyfacts; remember, easy-access options yield less (around 4.5%) but allow withdrawals without penalty.
Are children’s savings accounts tax-free?
Children’s savings accounts are tax-free on interest up to £100 per year from parental gifts under the parental savings allowance, but exceeding this may tax parents at their rate. Junior ISAs make all growth tax-free regardless, up to the £9,000 limit, avoiding PSA pitfalls entirely. For larger sums, JISAs are preferable; consult HMRC guidance to ensure compliance and maximise benefits without unexpected tax bills.
What’s the difference between a Junior ISA and a regular savings account?
A Junior ISA offers tax-free saving up to £9,000 annually with rates like 5.5% AER, but funds are inaccessible until age 18, making it ideal for long-term goals. Regular savings accounts provide flexibility with withdrawals anytime (e.g., 4.5% easy-access) but interest may be taxable if over £100 from parents. Choose JISAs for growth without tax worries; regular accounts suit short-term or emergency funds, per Which? comparisons.
Can parents open a savings account for their child?
Yes, parents or guardians can open a savings account for children under 18, acting as trustees to manage it until the child reaches 16 (for access) or 18 (for control). You’ll need the child’s birth certificate and your ID; applications are straightforward online via banks like HSBC or Virgin Money. This setup teaches financial responsibility while ensuring FSCS protection—start with a low-minimum account to build habits early.
What is the best high yield savings account for children in the UK?
The best high yield savings account for children in the UK is typically a regular saver at 7.5% AER, like those from First Direct, requiring monthly deposits for higher returns than standard 4.5% easy-access. For tax-free yields, opt for JISAs at 5.5%; these outperform general accounts but limit access. Advanced users should weigh penalties against gains, using Martin Lewis’ tips to avoid low-yield traps and project long-term value.
Rates and allowances can change; always verify with providers or official sources like MSE’s regular savers guide. Start saving today to give your child a head start—compare options now for the best fit.
