Saving bonds for children
Children’s Bonds were part of a government savings scheme to help save for your child’s future. They are no longer on sale, but if you had one of these accounts, you can ask NS&I for the money back.
Key takeaways
Upon maturity, bondholders could either cash in the bonds or reinvest the funds in another NS&I product
To cash in the bond you will need the child’s NS&I number and bond account number as well as proof of identity for both you and the child
There is usually no tax to pay on children’s savings accounts
What were NS&I Children's Savings Bonds?
Children's Bonds were a type of savings account offered by the government’s savings arm, National Savings and Investments (NS&I). They were specifically for children under the age of 16 and designed to be a long-term, tax-free savings option, with a fixed interest rate over a five-year term.
These bonds were particularly attractive to parents and other family members who wanted to set aside money for a child's future.
How did Children’s Bonds work?
The bonds had a fixed term of five years with a guaranteed tax-free interest rate.
Deposits could be made with amounts ranging from £25 to £3,000.
Upon maturity, bondholders had the option to either cash in the bonds or reinvest the funds into another NS&I product.
If the bond was cashed in early, there was a penalty equivalent to 90 days' interest.
What to do if your Children's Savings Bonds have matured
All Children's Bonds have now matured, and they were withdrawn from sale in September 2017.
Account holders have the option of either withdrawing the money in the bond, or putting it into another NS&I product – including a Junior ISA if the child has not yet turned 18.
NS&I said it sent letters out at the time to account holders, setting out their options, and any money that wasn’t claimed has been moved to its Residual Account for safekeeping.
If you didn’t received any communication from NS&I, it's important to contact them directly. You can fill in an online form and you’ll also have to the following:
The child's NS&I number and bond account number
Proof of identity for both you and the child
Bank details for the deposit if you're not reinvesting in another NS&I product
Alternatives to Children's Savings Bonds
There are lots of options when it comes to children’s savings accounts, including the following:
Regular savings account: With a regular savings account, you deposit a minimum amount of money each month for a set period, such as a year. These accounts often offer better interest rates than fixed-rate accounts, but access to the funds is restricted until the term ends.
Easy access: For those seeking flexibility, an easy access account allows you and your child to deposit and withdraw money at any time.
Junior ISA: A Junior ISA is a tax-free children’s savings account where you can invest up to £9,000 for the year 2024/25. You can choose from a cash Junior ISA or an investment Junior ISA. The funds cannot be accessed until the child turns 18.At this point the account becomes the child’s and they can withdraw the money.
How are children’s savings accounts taxed?
Just like adults, children are subject to tax, but most will not pay tax on their savings interest as they typically do not earn above the tax-free allowance. This is £12,570 for the 2024/25 tax year.
Additionally, children receive a personal savings allowance of £1,000 in savings interest free of tax each year for non-taxpayers. However, it's important to note that interest over £100 from money given by parents may be taxed.
Saving for your child's future beyond savings accounts
Beyond traditional savings accounts, there are other ways to save for your child's future:
Pensions: You can start a pension for your child, which they can access at age 57 or later.
Premium Bonds: Grandparents can purchase Premium Bonds for their grandchildren, which offer monthly prize draws.
Investments: Holding investments for your child in a designated or bare trust account can have different tax implications.
Resources and further reading
To help you make informed decisions, there are several useful guides available:
Comparing savings accounts with MoneySuperMarket
When you're ready to explore new savings options, MoneySuperMarket is here to assist. If you’re looking for a new savings account, we offer a comprehensive comparison of accounts from leading providers. Use our filters to browse a range of products, including cash ISAs, fixed-rate bonds, and easy access accounts.
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