Children’s bank accounts can be a minefield

NAVIGATING children’s bank accounts is not child’s play as enticing deals are littered with confusing terms and conditions.

For children to get the best bang for their buck, parents need to pay attention to the criteria that ensures they are getting the maximum returns on their hard-earned cash.

Financial comparison website RateCity analysed all available children’s accounts based on weekly deposits of $5 over 13 years – from when a child starts school to graduating after completing year 12. The highest returns on savings were $1169 for customers signed up to a Nexus Mutual Junior Saver Account, closely followed by CUA’s Youth Saver account.

But RateCity’s spokeswoman Sally Tindall said there are “a lot of nasties” to watch out for with children’s accounts. She warns banks are desperate to snare customers at a young age in the hope they will bank with them for life.

“But, that said, most accounts are riddled with terms and conditions.” While interest rates on adult accounts are often around one or two per cent, some children’s accounts have interest rates above four per cent. But some account interest rates drop once balances reach $5000.

Nexus Mutual chief executive officer Ashley Hood said it is vital children are engaged with their money and having a bank account is a good place to start.

The account offer by Nexus Mutual is only available to ExxonMobil employees, contractors and family, so parents must research what deals they can access.