Great bank accounts for kids and teens

It’s never too early to encourage children to start saving, so what are some great bank accounts out there for kids? And does it pay to shop around?

Whether you have a piggy bank or a traditional bank account, giving your kids a sound financial education can impact how they manage their money throughout their life.

Results from the The Programme for International Student Assessment (PISA) 2015 showed that students who hold a bank account scored on average 26 points higher than those who do not hold a bank account.

The same assesment showed that young people talking to their parents about money matters at least some of the time is associated with higher performance in financial literacy.

It’s clearly more important than ever that young people are encouraged to get to grips with their finances. And what better way to support a young person’s efforts at managing their money than by helping them open their own account? However, it pays to shop around to get the right account. Today chatted to Money Magazine Editor Effie Zahos to get her take on the best accounts for kids and teens.

TODAY: CommBank’s Dollarmites account is one we’ve all heard of. But is it the cream of the crop?

EFFIE: About 574,000 children use Commonwealth Bank’s ‘Dollarmites’* — which means CommBank make a lot of money from as those kids grow up and stay on as customers. A survey found that the 46% of Australians who opened their first account with CommBank had not left. But there are many other bank account options available for kids and teens that they might be better off using — many of these people have never heard of. Here are some good stats from Ratecity.com on different kids bank accounts and the interest they can accrue.

Bank Product Max rate Total after 10 yrs ($5/week) Interest after 10 yrs ($5/week)
Endeavour Mutual Bank* Kick Start Saver account* 5.00% $3,364 $764
NexusMutual* Junior Saver* 4.35% $3,250 $650
CUA* Youth eSaver* 4.00% $3,190 $590
BCU* Scoot Super Saver* 3.50% $2,916 $316
CBA* Youthsaver* 2.30% $2,753 $153

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TODAY: There are also some other kids savings accounts — can you tell us about them?

The Select Encompass Credit Union’s Kick Start Saver* pays 5% pa for balances up to $5000, there are no deposit requirements or restrictions on withdrawals and it’s available for children up to 17-years-old.

Any advice provided in this article is general in nature in that it does not take into account an individual’s particular circumstances or needs. Individuals should consider their own objectives, financial situation or needs, and if in doubt seek appropriate advice, before proceeding.