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A kids’ current account is a bank account for those aged under 18. For the most part, they work in a similar way to regular current accounts, although there might be more restrictions such as spending limits and parental controls.
Children’s current accounts are generally aimed at kids aged 11 to 17.
You can set a hard limit on how much cash they can withdraw
Some children’s accounts offer attractive interest rates
Online, mobile and phone banking to check balances and transfer money
Your child can only spend what they have in their account
A handy way to let your child know if money in their account is running low
Often you can open an account with just £1 - so it’s easy to get started
Most kids accounts have no fee but some charge if you want a debit card
You’ll usually need to give your child permission for a debit card
The right account for a teenager is one that suits their needs best. First and foremost, the account should enable them to easily manage their money. But you should also look out for a good rate of return and rewards for signing up.
A teenager should also have an honest conversation with their parent or guardian about what type of controls should be put in place, so they use the account wisely as they learn to handle money.
You can open a bank account for your child once they turn 11. A children’s bank account works in a similar way to a normal adult current account although there may be limits on spending and cash withdrawals. There’s no need to worry about your child getting in debt, as kids’ current accounts don’t have an overdraft. Parental controls help you monitor spending and online purchases and can open up conversations about money."
It’s unlikely your child’s current account will be taxed.
Both children and adults have a personal savings allowance which changes each tax year. That means everyone can earn up to this amount before it gets taxed.
This is boosted further as children are also eligible for the £5,000 starting rate for savings and the £1,000 personal savings allowance, so they can earn £18,570 this financial year before paying tax. This takes most children’s savings out of the tax bracket.
If you are giving your children money to put in their own account, be aware that if the money earns more than £100 in interest a year, the whole lot will be taxed at your tax rate.
The £100 limit doesn’t apply to money:
If a child is liable to pay tax, any tax due on interest earned will need to be paid to the appropriate tax authority. For more information, see the GOV.UK website.
Banks want to attract new customers so most familiar high street banks in the UK offer children’s current accounts often with incentives to entice you to sign-up. They are not your only option though. Newer so-called challenger banks -including the new digital banks - are also starting to offer children’s current accounts, so there should be plenty of choice.
Your child’s bank account will usually automatically upgrade to a standard adult current account when they turn 18. If your child has a savings account, their bank may offer them a children’s current account once they reach the age of 11.
The Current Account Switch Service pledges to make switching current accounts simple, reliable and stress-free. It’s a guarantee you’ll be switched to your new bank account – in this case children’s bank account – without any mistakes. You simply open the new account and pick your switch date.
A week before your new bank will start setting up your new account and any payments that go to your old account will be redirected. When switch day arrives, the balance will move to your new account and your old one will close.
How you manage your child’s current account depends on your relationship with your child and how much support they need in managing their finances.
Younger children typically need more parental controls in place, but this isn’t always the case. Being able to adjust the spending limit, for example, can allow you to tighten and relax controls as you see fit.
Children can open their own current account once they turn 16. But if they’re younger they’ll need a parent, grandparent or guardian to do this for them.
If you’re an existing customer of the bank where you want to open a new account for your child, you may only need proof of your identification, but terms and conditions will vary.
Yes, children’s bank accounts will offer debit cards which will allow your child to make purchases and withdraw cash from an ATM. Parental controls can still be put in place.
Yes. Children’s accounts are generally covered by the Financial Services Compensation Scheme which protects the first £85,000 of your money within each financial institution.
This means that even if the bank falls into financial difficulty the money is safely backed by the Government.
It’s a good idea to check your account statements regularly, because this could stop you going into your overdraft without knowing. It can also be a good way to double check whether there are any transactions you don’t recognise.
Look for a provider with good customer service, because you never know when you’ll need to call them up or go into a branch to fix an issue.
Remember to be careful with your PIN and account details; you should keep this information safe and protected. Remember, your bank will never ask you to reveal details like your PIN, either on the phone, in person or through an email.
Your bank will almost certainly have an app that lets you manage your account online, and some may even be based on their app. This is excellent for quick and easy money management.
Each bank has different ways of transferring money. Some require you to use a card reader when transferring any sum of money, while others only use it for transactions over a set amount.
Other banks do not use card readers at all, so if money transfers are something you might be doing a lot of, it’s worth checking the policy details to see how easy it is to make payments on the go.
If your current account comes with benefits such as air miles, you might want to check whether you really need them. For example, if you’re not a frequent flyer, is an air miles bonus worth the extra cost?
Switching current accounts is easy with MoneySuperMarket, and it could mean you get to take advantage of better interest rates and cashback rewards, vouchers and other incentives.
The process of switching will take a maximum of seven working days with the Current Account Switch Service – all your direct debits should be switched over automatically, and everything should be taken care of by your new account provider.
You can compare current accounts with MoneySuperMarket, and when you're ready to make the swtich, all you need to do is give your chosen new bank a few details such as your name, address and date of birth. You will also have to supply some documentation to confirm your identity and address.
You’ll be able to look at a number of important factors, like the interest rates they’ll pay, the overdraft rates they’ll charge, any rewards they provide, and any costs involved in holding an account.
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