Opening a bank account for your kids
As a parent, you want the best for your kids, and that includes setting them up for financial success in the years to come. One of the best ways to help your kids build their future nest egg is by setting up a kid’s bank account. But when’s the right time to set up your children’s bank account and what’s the best way to go about the whole process?
We’re here to help guide you through the different options and how to establish a bank account for your little one.
Key takeaways
- There's no set age, and the right time depends on savings versus teaching.
- Bring photo ID, your child's birth certificate and your address.
- Compare fees, base rate, bonus rate conditions and card access.
- Who declares the interest follows who owns and uses the money.
- Without a tax file number above the thresholds, the bank withholds 47% of the interest.
When’s the best time to set up children's bank accounts?
There are no hard and fast rules about when you should open up a bank account for your kids. While some people like to maximise their kid’s savings by opening up baby bank accounts when their bub is born, others prefer to set up their children's bank accounts when they’re a little older to help teach them the value of money.
Although there’s no golden rule as to when you should set up a bank account for your children, it’s well worth hunting around to find the best deal to help them get ahead. Many kid’s bank accounts offer a number of special features like no or low fees, bonus interest rates and parental control, so be sure to do your research to find an account that you think is best suited to your child.
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How do you open a bank account for a child in Australia?
For younger children, a parent or guardian opens the account and stays on it as signatory. Most major banks let a child apply on their own from around 12 to 14, and a few allow it earlier with a parent present, so check the age with the institution rather than assuming.
You'll usually need:
- Photo ID for yourself, such as a driver's licence or passport
- Your child's birth certificate, which also proves you're their parent or guardian
- Your residential address
Having these together before you start saves a second trip. Some banks handle the whole thing in-app, though many still want a branch visit when a child is involved.
What should you compare between kids' bank accounts?
Five things decide what a kids' bank account is worth: the monthly fee, the base rate, the conditions on any bonus rate, card and app access, and the minimum age. The headline interest rate on its own tells you very little.
| What to check | Why it matters | Ask the bank |
| Monthly fee | Most children's accounts waive it. Where one applies, it will outrun the interest on a small balance. | Is there a monthly account fee, and does it apply below a minimum balance? |
| Base rate and bonus rate | Bonus rates usually depend on conditions like a minimum monthly deposit and no withdrawals. Miss one and you drop to the base rate for that month. | What's the base rate if we miss the bonus conditions in a given month? |
| Card and app access | Some accounts include a debit card and app access from a set age, others are deposit-only until your child is older. | From what age can my child get a card and log in to the app? |
| Parental controls | Spending limits, notifications and locked withdrawals vary a lot between banks. | Can I set a spending limit and get an alert on every transaction? |
| Minimum age | Decides whether your child can run the account themselves or needs you on it as signatory. | What is the youngest age my child can operate this account alone? |
Children who set a target and watch it get closer tend to stick with saving, which is what the government's savings goals calculator and its age-by-age guidance on teaching kids about money are built around.
How do you get your kids interested in saving?
Not all children are excited to start their financial journey, but the process of setting up a kid’s bank account can help to teach your child the importance of financial literacy. Depending on your kid’s age and level of understanding, there are a few things you can do to get them interested in setting up their first bank account and establishing their savings.
1. Talk about money openly
Kids are curious, and they'll usually start the conversation themselves at the checkout. Use those moments to explain how you earn money and the difference between something you need and something you want.
2. Involve them in setting it up
Take them along when you open the account. Show them how to check a balance, and explain what interest is and why the number goes up on its own. Seeing it happen once does more than describing it three times.
3. Pay pocket money into the account
If you give pocket money or pay for jobs around the house, transfer it rather than handing over cash. Watching a balance grow off the back of their own work is a stronger lesson than the coins are.
4. Set a savings goal together
Pick something they want, then break the cost into weekly amounts. It teaches budgeting and delayed gratification at the same time, and it gives the account a point.
What are the benefits of opening your child's bank account?
There are a number of different benefits to setting up a kid’s bank account from establishing their savings early to introducing them to basic financial concepts. When it comes to money, learning about common money concepts from a young age can help to instil financial literacy so you’re kids avoid making costly financial decisions down the line. Here are some of the top reasons why you should consider setting up your children’s bank accounts.
1. Start your kid's savings
The sooner you set up your kid’s bank account, the earlier you can help them to start saving. Whether you set up a baby bank account or wait until your kids are old enough to help set up their own children's bank account, some people believe the sooner they get started the better. Plus, some children’s bank accounts also offer bonus interest rates, so the longer the account is open and being deposited into, the more your kids stand to save over the life of the account.
2. Introduce them to money concepts
Managing money is a hugely important skill that can be taught early on in life. Use setting up a bank account and saving money as opportunities to teach your kids basic financial concepts which can help them to build positive money habits.
Setting up a savings account can help them to learn about the concept of interest and how this can help them to build their wealth over the long term. You can also use a bank account to teach them about the importance of common financial concepts like budgeting, saving, investing and consciously spending.
3. Encourage financial independence
Teaching your kids how to save and effectively manage their money is one of the best ways to encourage financial independence from a young age, which will set them up for success in the future. From setting up their own business to living a life free from the stress of debt, there are so many benefits to understanding the importance of financial independence.
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There’s no perfect time to set up your children's bank accounts, but getting them involved in the process from an early age is a great way to kickstart their financial independence and teach them basic money management concepts. Although these lessons are priceless while they’re young, they will pay dividends in the future.
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