Nationwide launches market-leading account for kids paying 3.5%
Parents who hold a current account with the building society will be offered the higher interest rate on savings up to £5,000
PARENTS looking to save for their children’s future now have a new account to consider from Nationwide.
Today the building society launched its Future Savers account where parents can access an interest rate of 3.5 per cent on savings up £5,000.
Only those who have a main a current account with Nationwide will be offered the 3.5 per cent interest rate – however those who don’t will be offered a lower rate of 2.5 per cent.
The account allows only up to one withdrawal a year and if you go over the limit, the interest rate will drop to 0.5 per cent for the rest of the year.
Nationwide say parents will have access to the account until they decide to hand it over to their child.
Tom Riley, director of savings at Nationwide, said: “Many parents start to save for their child’s future as soon as their child is born. They have aspirations and dreams for their child right from the start and want to do all they can to put them on the right path for when they start their adult life.
“The account also allows parents to educate their children on why getting into the savings habit is an important life skill. Putting away a few pounds of pocket money or cash presents from family and friends on birthdays and Christmas can soon help the total build up.”
Top 5 Children's Savings Accounts
Moneyfacts has rounded up the best offers on savings accounts for kids:
- Nationwide Future Saver – This new account offers a rate of 3.5 per cent for those who already have an account, and 2.5 per cent for those who don’t
- Halifax Kids’ Monthly Saver- This offers one of the highest rates at 4.5 per cent
- HSBC MySavings- The bank raised the rate from 2.75 per cent to 3 per cent this month
- Skipton Children’s Saver Issue 3- The building society currently offer a rate of 2.3 per cent
- Virgin Money Young Saver Issue 5 & Fred the Red Young Saver Issue – Both accounts offer a rate of 2.3 per cent
We’ve compared the Future Saver account to other children’s savings account, and it appears to offer one of the highest interest rates.
Halifax’s Kids’ Monthly Saver is the only account which tops Nationwide, with a 4.5 per cent fixed rate.
Charlotte Nelson, finance expert at Moneyfacts, said: “At 2.50 per cent non-current account holders won’t be missing out on a best buy worthy option either, but as always shopping around is a must.
“With only one withdrawal permitted per year before a lower rate is paid, careful planning is required.
“Encouraging the savings habit for your children is a great life lesson. By getting an account with a higher rate it will not only show them how to save but the power of interest.”
This month HSBC also raised the interest rate on its MySavings account from 2.75 per cent to 3 per cent. The account is for children aged seven to 17-years old and is for savings up £3,000.
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