Higher Interest Rate On Children’s Savings Account From Lloyds TSB

Lloyds TSB Young Saver account for children is now available paying a competitive 3% AER variable interest rate.

The new children’s savings account from Lloyds TSB can be opened by an adult on behalf of a child with a minimum deposit of £1.

The interest rate of 3% AER variable is available on balances up to £20,000. Above this level the interest rate is 0.5%.

Greg Coughlan, Head of Children’s savings at Lloyds TSB comments: “Now more than ever is a really important time to teach the adults of the future the value of money management.

“Increasing the rate on our Young Saver account is one way we can help invigorate the children’s saving market”.

This savings account is only available in branches, although instant access is available. Regular payments can be set up into the account from any designated current account to help grow the savings and when the child reaches 16 the account converts into an Easy Saver account.

Existing Young Saver customers need to visit a Lloyds TSB branch to benefit from the increased interest rate.

MoneyHighStreet comments: “With a competitive current interest rate of 3% AER this is certainly a children’s savings account to consider. Another option may be the Northern Rock Little Rock Instant Access which also currently has a 3% interest rate.

If you are prepared to lock the savings away for a period of time, other accounts to look at include the 1 year West Bromwich Regular Saver Child at 4.6% AER with a minimum investment of £10 and the 12 month Principality BS Dylans Regular Saver Bond at 4.5% into which you can invest between £10 and £150 per month.

As Greg says it is vital to teach children the value of money management – both how to save money and spend it wisely and within a budget. Even if it is only pocket money at this stage this can be a surprisingly large amount and children really do need to learn to manage what they have.

As my Grandmother used to say ‘Look after the pennies and the pounds will look after themselves’ – or in other words ‘save some, spend some’.

By the way, what is the ‘going rate’ for pocket money – any thoughts? Do children still get their pocket money based on doing jobs or are they paid regardless? And what about if they are naughty, is it taken away?