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Opening bank accounts for teenagers

If you ask your teenager what they want from their bank account the answer will probably be freebies. Most banks or financial institutions offer free items ranging from clothing vouchers to music CDs to try and tempt a teenager in to opening an account with them. While free items are nice, they are often a cunning disguise for a less than impressive interest rate -- meaning for the sake of a music CD, your teenager may be losing money on their savings.

Before opening bank accounts for teenagers it is important to consider what they will be using the account for and how much money is likely to be in it. For example, if your teenager has a job and needs a place for wages to be paid so they can withdraw them, a high interest rate is less important. If your teenager has a lump-sum they wish to invest or they want to begin saving each month, the account's interest rate is all important.

Both HSBC and Lloyds TSB are currently offering two of the most popular bank accounts for teenagers, complete with a debit card which allows them to pay for items online or in stores. However, the most popular of all these accounts is currently the one offered by Santander. The Santander eSaver is a completely online account and offers an interest rate of 4.7%. Your teenager can open this account with as little as £1 and will have access to a number of resources including a debit card and direct debit facilities.

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