Bank savings accounts for kids aim to teach grown-up ways

AIB's account for children is called the Junior Saver. Parents bring the child into an AIB branch, with their ID and a letter introducing their child to the bank. At 13, the children are eligible to transfer to a Teenlink account without changing their account number. The interest rate for Junior Saver and Teenlink accounts is 1.125 per cent and is paid quarterly.

Bank accounts for children promote saving habits as well as encouraging lifelong customer loyalty. According to AIB, teaching children how to save from an early age will bring them one step closer to financial health in later years.

Relatives who want to give regular financial gifts to children to mark their birthday or Christmas but don't want to see their crumpled €5 note being spent in the sweet shop at the first opportunity, can make a lodgment to kids' savings accounts at most major banks.

However, there are legal restrictions on withdrawing from accounts in the name of children under the age of seven.

At Ulster Bank, primary school children can join Henri's Super Savers Club and receive comics, calendars, posters and stickers. A minimum balance of €5 is needed to open the account, with interest rates starting at 0.10 per cent.

Accounts may be opened in the name of the child up to the age of 11, but until the child reaches seven, withdrawals cannot be made. If the account is opened in the name of an adult for the child, the adult can make withdrawals at any time.

The child's club membership card must be shown when making withdrawals.

At Bank of Ireland, children up to the age of 12 can open a Rainbow account with as little as €1. Interest is paid every quarter, with the rate depending on the amount lodged to the account.

To take money out of the account, children call in person to their local Bank of Ireland branch and fill out the withdrawals slip, but they can check their account balance using phone or Internet banking.

Parents, godparents, relatives and friends can set up a standing order for regular payments to a Rainbow account. For people over the age of 12, Bank of Ireland has a separate second-level student account, which allows teenagers to withdraw money from ATMs and offers discounts on a dual Banking 365 / Scholar card.

An Post runs a School Savings Scheme and says practising saving in the group atmosphere of a classroom generates enthusiasm. There are two types of savings schemes.

Under the savings stamp scheme, school children buy €1 stamps from their local post office on a designated stamp day and affix the stamps to Cyril's Savings Card under the guidance of their teacher. When the card is completed it can be used to open a Post Office Savings Bank account or to make a deposit in an existing account.

In An Post's savings club scheme, all the pupils' savings are put into one account, run by at least two teachers who act as trustees.

The idea behind most financial products and services for kids is to make saving fun while introducing them to simple versions of grown-up banking. Slotting coins into a piggy bank is still a traditional way to teach kids the value of saving rather than spending, and most banks will give children a free moneybox and a deposit book when they open their account.