Children’s Bank Account rates

Why Have a Children’s Bank Account

It is very important to educate children about the importance of savings very early on in life. Children should also be taught about the usefulness of banks and savings and a basic understanding about the rates of interest.

Today, in UK parents have the option to choose from local as well as online banks for their children. For children, the best savings accounts are the online accounts which are linked back to a local account. Both of these savings account have a purpose for families and for children since they educate children on the basic differences between these types of accounts and will start your child on a good path early on in life.

Most people find banking and finance to be utterly boring. On the other hand, it is a fundamental concept which should be taught to children at a very early age since it would help them more about financial aspects later in their life.

Teach children the basic types of bank accounts, the importance of having an account, savings and the rates of interest. It could be a great opportunity to explore the different options available to children by involving them in the process.

Rates of Interest

While selecting any children’s bank account it is extremely important to first consider the rate of interest offered on that bank account. when it comes to children’s account, usually the rates of interest are not very high since these accounts have almost no restrictions at all on the minimum deposit amount and withdrawals.

However, if you select one which offers a great rate of interest, the child would be encouraged to save more when he/she finds the savings growing. These factors should be discussed by the parents with their children.

Rates of Interest in the UK

In UK, children’s bank account rates tend to vary depending on a lot of factors. Banks which have no restrictions on the minimum balance which has to be maintained in the account or the minimum monthly deposit which has to be made would typically have a lower rate of interest. However, there are many banks which offer higher rate of interest if a specified amount is deposited in the account every month.

Halifax for example offers a great rate of interest of 6% on the savings account for children. Bank of Scotland too offers children’s bank account rates at 6%. Most other banks have an annual rate of interest from 4% to 5% annually for their children’s account.

Parents who take some time to learn the basic banking and savings information themselves would be well prepared to teach finance and banking to their children. Basic home finance is vital for every child at an early age.

Parents should take the time out  to educate their children on how banks operate and how they can benefit from saving every month. Though, the idea might sound quite dull, it is in fact very important. Making these lessons meaningful and fun for children would encourage them.