Youth Banking: Interest rates and fees

What interest rates can Junior and Youth savers expect to earn? And what fees will they pay for it? CANSTAR investigates.

You empty your wallet out onto the floor, then spread out all the coins and notes. You don’t actually have many, since these days you pretty much use your debit card to tap and go for almost everything, but you figure your kids should see some real coins at least once. You tell your son and daughter they’re going to invest a $1 coin at 10% interest for 10 years. They’re looking kind of curious, always a good sign.

Then you start trying to explain the concept of compound interest. You realise that actually, you’re not all that clear on how it really works, or what amount they would end up at after 10 years… You pull out a calculator and start typing in numbers, hoping the calculator will lead the way to the answer. You think to yourself, there’s just got to be an easier way…

One option is setting them up with a school banking or junior banking account and they can see compound interest at work making their savings grow, and if they pay fees, they can see a bit of their money disappear again.

Here at canstar, we’re here to help by laying out for you what interest rates and fees you can expect to find in Junior and Youth saving accounts around the country.

 

Compare Youth Banking Accounts with CANSTAR's Youth Banking Award Report

Interest rates

What interest rates can junior and youth savers expect to earn? It varies (very slightly) depending on your account balance.

Junior Accounts

Balance Minimum Maximum Rate Average Rate
$500 0.25% 4.00% 1.93%
$1,000 0.25% 4.00% 2.01%
Interest rates were taken as at 1st May 2016.

Total rates are utilised (base rate plus conditional bonus rates).

Source: www.canstar.co.nz

 

We have assessed any accounts available to those ages 12 or under. This includes both junior accounts and standard at-call accounts, as some institutions do not have specific junior accounts. Only accounts offering an interest rate were included.

Youth Accounts

Balance Minimum Maximum Rate Average Rate
$1,000 0.10% 4.00% 1.72%
$2,000 0.10% 4.00% 1.78%
Interest rates were taken as at 1st May 2016.

Total rates are utilised (base rate plus conditional bonus rates).

Source: www.canstar.co.nz

We have assessed any accounts available to those between the ages of 13-17. This includes junior accounts, student accounts, and standard at-call accounts, as some institutions do not have specific junior or youth accounts. Only accounts offering an interest rate were included.

Fees

Although savings accounts are not transaction accounts, most accounts will let you make transactions – for a fee. Generally, the transaction fees charged on a savings account are quite high, because these accounts are not designed for transactional purposes.

Depending on the account, your bank may waive the fee for those under the age of 18, but you should check with your bank before making a transaction.

Be aware that the following costs can apply:

ATM withdrawal fee:

  • Min: $0.45
  • Max: $5.00

EFTPOS fee:

  • Min: $0.30
  • Max: $5.00

Internet transfer fee:

  • Min: $0.45
  • Max: $5.00

Branch withdrawal fee:

  • Min: $0.30
  • Max: $5.00

Compare your options

Compare Junior Banking or Youth Banking savings accounts with the CANSTAR Award report, and see if you can’t find outstanding value for your kids. Help them sign up for an account and it could be the beginning of a beautiful friendship between your kids and savvy saving habits.

 

Find out who won CANSTAR's 2016 Youth Banking Award

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