Types of child savings accounts in the UK
The best child savings account depends on your goals, but Junior ISAs often top the list for tax-free growth until age 18. These accounts help parents build a financial foundation for their children while maximising interest earnings. Other options like regular savers and easy access accounts offer flexibility for different needs.
Junior ISAs explained
Junior ISAs are tax-free savings accounts for children under 18, with an annual allowance of £9,000 in the 2025/26 tax year. Funds are locked until the child turns 18, making them ideal for long-term savings. According to Which?, they are among the best child savings accounts in the UK for secure, high-yield growth without tax worries.
Regular saver accounts for kids
Regular saver accounts encourage monthly deposits, often yielding up to 6.5% AER if conditions are met, as noted by MoneySavingExpert. Penalties apply for missed payments or early withdrawals, but they suit disciplined savers. The best child savings account uk in this category limits deposits to £50-£500 monthly, helping build habits early.
Easy access options
Easy access child savings accounts allow withdrawals anytime, with rates around 4.25% AER from providers like Coventry Building Society. They offer liquidity for short-term needs while still earning interest. For parents seeking the best savings account for a child with flexibility, these are a strong choice.
Fixed-rate bonds for children
Fixed-rate bonds lock money for a set period, guaranteeing rates like 5% AER. They provide stability but limit access, suiting those confident in their plans. Moneyfacts Compare highlights these as top picks for predictable returns in child savings.
Top child savings accounts compared
Comparing the best child savings accounts reveals Junior ISAs from Nationwide and regular savers from Virgin Money leading with competitive rates up to 5.5% AER. Ethical options from Coventry stand out for sustainability-focused parents. Use the table below for a quick overview based on 2025 data.
| Provider | AER (%) | Min Deposit | Access Type | Tax Status |
|---|---|---|---|---|
| Nationwide Junior ISA | 5.5 | £1 | Until 18 | Tax-free |
| Virgin Money Regular Saver | 6.5 | £1 | Monthly deposits | Taxable (parent’s allowance) |
| Coventry Easy Access | 4.25 | £1 | Anytime | Taxable |
| Halifax Kids’ Saver | 4.0 | £1 | Until 16 | Taxable |
All accounts are protected by the FSCS up to £85,000. Rates sourced from MoneySavingExpert and Which? as of October 2025; they may vary.
Best overall picks
The top picks for the best child savings account include Nationwide’s Junior ISA for tax benefits and Virgin Money for high yields. Martin Lewis recommends these on MoneySavingExpert for their balance of rate and accessibility. Parents should compare based on deposit habits.
Highest interest rates
For the best interest rate child savings account, regular savers hit 6.5% AER, per MoneySavingExpert’s 2025 guide. Junior ISAs follow at 5.5%, tax-free. Avoid low-rate options below 4% to maximise growth.
Best for ethical saving
Ethical choices like Coventry Building Society’s 4.25% AER account invest in green projects, as detailed by Good with Money. These appeal to parents wanting the best high yield child savings account with a conscience. They match standard rates while supporting sustainability.
Provider reviews
Providers like Nationwide earn high marks for app-based management, while Coventry excels in customer service. Reviews on MoneySuperMarket show over 1.2 million Junior ISAs open, with average 5% yearly growth. Check MoneySuperMarket’s savings overview for user ratings.
How to choose the best account for your child
Start with your child’s age and your savings horizon; for long-term, opt for no-access-until-18 accounts like Junior ISAs. Consider AER, fees, and tax status to find the which savings account is best for a child. Always verify eligibility and current rates.
Factors to consider
Key factors include interest rates (AER, the annual equivalent rate), minimum deposits often £1, and access restrictions. The best bank for child savings account balances yield with usability. Ethical alignment and FSCS protection are essential too.
Tax implications and allowances
Junior ISAs are fully tax-free up to £9,000 yearly, per HMRC rules. Regular accounts fall under parents’ £1,000 personal savings allowance. HMRC’s ISA guide clarifies: children’s interest counts as parents’ for tax, but under £100 avoids issues. Consult a advisor for complex cases.
Setting up and eligibility
Children under 18 qualify; parents or guardians open accounts with proof of address. Online setup takes minutes via providers like Barclays. Barclays’ children’s savings page outlines ID needs: child’s birth certificate and parent’s details.
Tip: Start small with £10 monthly to build the habit. Track rates quarterly as they change—use comparison sites for the best child savings account no access until 18.
Pros and cons of popular providers
Nationwide and Halifax
Nationwide pros: Competitive 5.5% Junior ISA, branch access. Cons: Variable rates drop if base rate falls. Halifax offers 4% easy access but limits bonuses after a year.
Coventry Building Society
Pros: Ethical 4.25% AER, strong FSCS cover. Cons: Online-only for some, slower withdrawals. Ideal for the best long term savings account for child with values.
Online banks like Virgin Money
Pros: Up to 6.5% on regular savers, user-friendly app. Cons: Penalties for missing deposits. Forbes’ review praises their digital ease for parents.
Long-term savings strategies for children
For the best long-term savings account for child, combine Junior ISAs with regular deposits to leverage compound interest. Projections show £9,000 yearly at 5% AER growing to over £100,000 by 18. This builds wealth without access temptations.
Building wealth until age 18
Lock funds in Junior ISAs for tax-free compounding; at 5.5% AER, a £50 monthly start could reach £15,000 by 18. Over 1.2 million accounts exist, per MoneySuperMarket. Avoid early dips to maximise the best child savings account benefits.
Combining with investments
Pair cash ISAs with stocks and shares Junior ISAs for higher potential returns, but with risk. Start conservative; Which?’s 2025 guide advises diversification post-basics. Remember, this is not financial advice—seek professional input.
Frequently asked questions
What is the best child savings account in the UK for 2025?
The best child savings account uk for 2025 is often the Nationwide Junior ISA at 5.5% AER, offering tax-free growth until 18. It suits long-term savers with minimal £1 deposits and FSCS protection. Compared to regular savers, it avoids tax pitfalls, as recommended by Martin Lewis on MoneySavingExpert, but check current rates for your needs.
Are child savings accounts tax-free?
Junior ISAs are fully tax-free, allowing £9,000 annual contributions without HMRC impact. Regular child savings accounts use the parent’s personal savings allowance, so interest under £1,000 evades tax for most. This distinction makes Junior ISAs the go-to for the what is the best savings account for a child seeking efficiency.
How much interest can a child savings account earn?
Top accounts earn up to 6.5% AER on regular savers or 5.5% on Junior ISAs in 2025. For example, £1,000 at 5% yields £50 yearly, compounding over time. Factors like deposit size and rate changes affect this; use calculators from sites like Moneyfacts for projections.
What age can a child open a savings account?
Children from birth can have accounts opened by parents or guardians, with no upper limit under 18 for Junior ISAs. At 16, some kids manage independently, but full control comes at 18. This setup encourages early financial education, aligning with the best savings account for child strategies.
What’s the difference between Junior ISA and regular child saver?
Junior ISAs are tax-free and locked until 18, ideal for long-term like the best child savings account no access until 18. Regular savers offer higher rates like 6.5% but taxable and more flexible. Choose based on access needs; ISAs excel for growth, per MoneySavingExpert’s comparisons.
Which bank offers the highest child savings rate?
Virgin Money leads with 6.5% AER on regular child savers, requiring monthly deposits. For tax-free, Nationwide’s 5.5% Junior ISA is tops. Rates fluctuate, so the best bank to open savings account for child depends on 2025 updates from sources like Which? Always verify for bonuses and limits.
This article provides general information and is not personalised financial advice. Rates are indicative as of October 2025 and subject to change. Consult a qualified advisor for your situation.
