How to save for your grandchildren: the best accounts & need-to-knows
What you can open, when you need permission, and the best options available now
Want to give your grandkids a head start? Whether it’s a small monthly pot or a bigger lump sum, there are several smart ways to save for your grandchildren. But not every account lets grandparents open one directly, and in many cases you’ll need the parents or guardian’s permission. This guide explains how it all works, which accounts you can open yourself, and the best rates available right now.
First, a quick overview of saving for your grandchildren
If you want to put money away for your grandkids, there are several ways to do it. Here are the key things you need to know and top-pick accounts:
Some children’s savings accounts let grandparents open them – you’ll usually act as a trustee, managing the money until your grandchild turns 16 or 18.
You’ll often need the parent or guardian’s permission and the bank will usually want to see the child’s birth certificate.
Can’t involve the parents? You can still save in your own name or open a bare trust to ringfence the money for your grandchild.
Tax rules apply. Interest on accounts in your name counts as your income, and large gifts may affect inheritance tax.
Provider | Rate (AER) | How to open |
4.18% on £10–£25k | Branch/post | |
3.75% on £3k–£25k | Branch/post | |
3.65% on £1–£100k | Branch/post | |
2.5% up to £5k | Online/branch | |
1.85% on £1+ | Online/app/branch (must be NatWest customer) |
How children’s savings accounts work when opened by grandparents
When you open a child’s savings account as a grandparent (or other non-parent adult), you’ll usually be set up as a trustee or account operator. That means you manage the account – paying in and controlling withdrawals – but the money legally belongs to the child.
You’ll typically keep control until the child turns 16 or 18, depending on the account. Some allow limited access earlier (eg, letting them withdraw small amounts from age 7 or 12) — but only if you authorise it.
Who controls the money?
As a trustee, you have full control over the account – including making withdrawals, switching providers and closing it. You may be able to authorise the child to make withdrawals once they reach a certain age, but this depends on the provider’s terms.
If you withdraw money, it must clearly benefit the child – for instance, for school costs or educational expenses – and some providers may ask for proof such as receipts. Importantly, you can’t use the money for yourself, even if you change your mind about giving it.
Can the child and/or parent access the money?
Generally, no. If you open the account, the parents or guardians won’t have access to the funds. Some accounts allow limited child access from a certain age, but only if you’ve granted permission. Until the account legally transfers to the child, you remain the sole controller.
When does the child take over?
When the child turns 18, the trustee role ends and the account is usually transferred into an adult easy-access account in their name. The provider may ask the child to reverify their identity with photo ID and proof of address before they can take full control of the funds.
How to open a savings account for your grandchild
Most accounts that grandparents can open will need to be set up in branch or by post, though a few allow online applications – typically with lower interest rates.
To open one, you’ll need to be a UK resident aged 18 or over. Some providers may ask that you’re a close family member, such as a grandparent, aunt or uncle – this varies by provider.
You’ll usually need to provide:
-
Photo ID and proof of address for yourself
-
ID for the child, such as a birth certificate or passport
Do grandparents need parents’ permission to open a savings account?
In most cases, yes – you'll need the parent or guardian’s permission to open a child’s savings account. Some providers ask for this during the application process, while others may notify the parent after the account is opened. In either case, they usually have the right to request changes or even close the account. If you can’t – or don’t want to – involve the parents, we've gone through some options here.
That said, once the account is up and running, only you – as the trustee or account operator – will be able to manage it, unless you choose to authorise the child to take on some control. The parent won’t be able to access or withdraw any of the money.
Top savings accounts grandparents can open for grandchildren
These accounts are all easy access and allow non-parents/guardians to open them on behalf of a child. It may also be worth checking if your existing bank has account like this on offer. For more accounts, including those where the child has control of the account, see our Children's savings guide.
Grandparents savings – what we'd go for
The top rate is branch/ post only. Kent Reliance pays 4.18% and grandparents can open the account on behalf of a grandchild. Once the child turns seven you'll have the option to grant them access to the account, however you can choose to wait until they are 18 if you prefer.
The top online accounts pay less. Halifax pays 2.5% and can be opened and managed online. You can open this account as a trustee on behalf of a child of 0-15yrs.
Account & interest rate (AER) | How to open | Access & control |
|---|---|---|
Top-paying accounts | ||
4.18% on £10 to £25,000 | For children aged 0-17. Open in branch/post (2x ID + child's birth certificate) | Grandparent controls. Can give access from 7. Full control passes at 18. |
3.75% on £3,000 to £25,000 | For children aged 0-17. Open by branch/post (soft credit check + child ID such as birth certificate or passport) | Grandparent controls. Full control passes at 18. |
3.65% on £1 to £100,000 | For children aged 0-17. Open in branch/post (photo ID for both adult and child) | Grandparent controls. Can give access at 16. Full access at 18. |
Top online accounts. Lower rate but can be opened & managed online. | ||
2.5% on £1 to £5,000 | For children aged 0-15. Open online or in branch (photo ID for both adult and child) | Grandparent controls. Can transfer to child at 16 or continue in trust until 18. |
1.85% on £1+ Withdrawals can only be made in branch. But you can transfer money online, by the app, or by phone. | For children aged 0-15. Open online, via app or in branch (must be a NatWest current account holder + child ID) | Grandparent controls. Child can access from 11 (with adapt account). Full control at 16 (Scotland) or 18 (rest of UK |
All the accounts listed here have Financial Services Compensation Scheme savings protection of up to £120,000.
Can grandparents open a Junior ISA?
A junior ISA can only be opened on behalf of a child by its parent or guardian. This means grandparents (unless they are the legal guardian) can’t open a Junior ISA for a grandchild.
You can pay into a junior ISA once it’s been opened, however. So if your grandchild already has one, or you advise their parent/guardian to open one, you can pay in up to £9,000 per tax year. This can be a secure option for those who want to ensure the money won’t be touched until the child is older. While the parent/guardian is in charge of account management they can’t withdraw funds. Neither can the child until they turn 16 (when they take over management of the account).
So, used regularly this can be an excellent way to build a tax-free savings pot for a child that will only be accessed when it’s near adulthood.
For more info and full best buy see our Junior ISA guide.
Are Premium Bonds a good option?
Historically, many grandparents have gifted their grandchildren Premium Bonds. Over to MSE founder Martin Lewis...
In my view, many would be better off sticking with normal savings over Premium Bonds.
Premium Bonds are govt-backed savings, where the interest is based on a prize draw. The current prize fund rate is just 3.6%, yet even that overestimates what most people will actually win with typical luck (see Are Premium Bonds worth it? for a full explanation).
Premium Bonds are best for:
1) Those with larger savings, say over £5,000, as then you've a better chance of earning closer to the published prize fund rate. With less, the odds are you will win little or nothing.
2) Those who pay tax on their savings interest, who have used up their ISA allowances, as Premium Bond winnings are always tax-free.
As most children have small amounts of savings and aren't taxpayers, Premium Bonds are particularly unsuitable. Of course, there's the ludicrously small chance your child will win a million, but they could also toss a coin and it land on its edge.
So if you're thinking of putting £1,000 or less into Premium Bonds for a child, it's worth noting that with average luck our Premium Bonds Probability Calculator shows they are likely to win nothing over a year (give it a try based on your scenario).
What if you don’t want to (or can’t) involve the parents?
We know not every family setup is straightforward. You might be no longer in contact, or simply not on terms where you feel comfortable asking for permission or access to documents like a birth certificate. Or perhaps you have concerns about how the money might be used if the parents are involved.
Whatever the reason, you’re not alone. We regularly hear from grandparents in this position – people who love and want to provide for their grandchildren but feel stuck because they can’t go through the usual routes.
The good news is you still have options:
Option 1: Save in your own name, then gift later
-
Open a savings account in your own name
-
Set aside money specifically for your grandchild
-
Gift it when they turn 18, or when you feel they’re ready
-
You don’t need permission or ID from anyone
This is often the simplest route if you want full control or a quiet way to build a nest egg. See our Top savings accounts guide for full options.
Watch out for tax: If you go down this route, the savings interest is treated as your income – and when you gift the money, it may count towards your estate for inheritance tax purposes. See the section the tax implications when grandparents save for how this works and what to watch out for.
Option 2: Use a bare trust
If you want the money to legally belong to your grandchild (rather than stay in your name), you could set up a bare trust.
-
You act as a trustee, managing the money on their behalf.
-
It legally belongs to the child – but they can’t access it until they’re older (usually 18, or 16 in Scotland).
-
You’ll still need ID for the child – but in some cases this may be easier to get than parental permission.
This option gives you peace of mind that the money is earmarked for them – but also adds a bit more structure and legal protection. Keep in mind that with bare trusts, any interest earned is treated as the child’s income, not yours – so it’s usually tax-free unless you’re gifting very large sums.
Are there any tax implications when grandparents save for grandchildren?
Yes – while most grandparents won’t face issues, there can be tax implications depending on how much you give, how you save, and whose name the money is in. Here’s what to watch for:
Income tax on savings interest
If you open a savings account in your own name, any interest earned counts as your income and may be taxable depending on your total earnings.
If you open the account in the child’s name (eg, as a trustee), then the interest is taxed as the child’s income – and most children have no tax to pay, as they get a personal allowance (£12,570 a year as of 2025) and a savings allowance.
This means in most cases, no tax is due – but it’s worth keeping an eye on the total interest if you're saving large sums. For full info read our guide on How savings tax works.
Inheritance tax (IHT) on gifts
If you're gifting money outright (eg, putting it into the child’s own account or giving them cash when they turn 18), then inheritance tax rules may apply if you pass away within seven years of making the gift:
You can give away up to £3,000 a year without it counting towards your estate (this is your annual gifting allowance).
Larger gifts can still be tax-free, but only if you live at least seven years after making them.
Regular gifts from income (eg, a monthly standing order into a savings account) may also be exempt, provided they don’t affect your standard of living.
If you're saving significant amounts, or gifting large lump sums, it’s worth reading up on inheritance tax gifting rules or speaking to an adviser. Read more in our Inheritance tax guide.
Want to complain about your savings provider?
If your savings provider has given you the incorrect interest rate, or you haven't received your interest at all, then you don't have to suffer in silence.
It's always worth trying to call your provider first to see if it can help, but if not, you can use free complaints tool Resolver. The tool helps you manage your complaint, and if the company doesn't play ball, it also helps you escalate your complaint to the free Financial Ombudsman Service.
FAQs
It depends on how you’ve set up the savings:
-
Account in your name: The money forms part of your estate and is distributed according to your will or intestacy rules.
-
Account in trust / as account operator: The money legally belongs to the child and doesn’t become part of your estate. A new trustee (often the parent or guardian) would take over.
If you’re saving for your grandchild, make your intentions clear in your will so there’s no confusion later.
Most UK savings accounts require the child to be a UK resident, and many also require the trustee (you) to live in the UK. If your grandchild lives overseas, you may need to:
-
Save in your own UK account and gift the money later, or
-
Explore savings options in the country where your grandchild lives.
You can open separate accounts for each grandchild, but:
-
Each account has its own deposit limits.
-
Some providers may require parental permission for each child individually.
-
If you’re saving significant amounts, make sure you understand any inheritance tax (IHT) rules around large gifts (over £3,000 a year).
Usually not. If you’ve already got savings in your name, you can:
-
Withdraw the money and pay it into a new account for your grandchild, or
-
Gift it directly when they’re older.
Remember, if you move large sums, IHT gifting rules could apply if you pass away within seven years.
With most child savings accounts, control automatically passes to the child at 16 or 18 (depending on the provider). If you want to restrict when or how the money is used — for example, only for education or a first home — you’d need to look at setting up a trust or writing these wishes into your will.
What happens if I die before my grandchild gets the money?
Can I open a savings account for my grandchild if they live abroad?
What if I want to open accounts for multiple grandchildren?
Can I transfer an existing savings account into my grandchild’s name?
Can I set conditions on when my grandchild gets the money?
If you want to help a child open an account, or are a parent or guardian looking to open one on their behalf, try these guides:
'Normal' kids' savings: These pay up to 5.5%, typically on smaller amounts. Most accounts give instant access.
Top junior ISAs: These can only be opened by a child's parent or guardian, but anyone can pay in and the money's locked away until the child is 18.
Share this guide?
