Save the children

Half of children's banks accounts offer interest at a rate of less than 1 percent, according to a new survey out today.

Which? Money found that over half of children's easy access accounts offer rock-bottom AERs of 1 percent or less.

And one account even offered interest at a rate of 0.05 percent – that's a return of 50p for every £1,000 saved.

With so little incentive on the table, banks seem to be doing very little to encourage kids to save.

Which? executive director, Richard Lloyd, said: 'It's incredibly important that young people get into the habit of saving, but banks and building societies are doing little to encourage them by offering such paltry rates.'

Even Child Trust Funds, traditionally the way to go for parents wanting to safeguard some cash for their children's future, are offering low rates. Some are as low as 1.1 percent AER.

Editor of the Which? Money Magazine James Daly said: 'We would usually recommend that people take out a Child Trust Fund but they are now being shut down and our fear is that, with a closed market and no new customers, they will continue to offer poor value.

'We are very disappointed with our findings.'

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