Can I open a bank account for my grandchild in Australia?
If you want to help your grandchildren save for the future, opening a bank account for them could be an option.
22 July 2025
If you want to help your grandchildren save for the future, opening a bank account for them could be an option.
Key points:
- Opening bank account for grandchildren can be a way to teach them about saving and responsible spending.
- Greater Bank is among the institutions that allows grandparents to do this, with its Life Saver account.
- You’ll need to have ID for both yourself and the child – for example, a passport or birth certificate – to open an account.
Why open a bank account for grandchildren?
Grandparents can play a key role in the lives of their grandchildren, and getting involved can go well beyond tossing a ball around the backyard or minding the kids after school. Some grandparents may wish to open a bank account for their grandchildren to help them save for the future, or just to have somewhere secure to slip them some money on birthdays and other occasions.
Doing this can also be a way for you to kickstart conversations with youngsters about saving money and sensible spending, putting habits in place that could help them thrive as fiscally responsible adults.
Can grandparents set up savings accounts for grandchildren?
Some banks make it possible for a grandparent to open a bank account for their grandchild, but it may not automatically be an option with all providers. It my be the case with some institutions that you must be either a parent or guardian in order to open a bank account on behalf of a child. Consider checking the account terms and conditions or contacting the bank to ask what its rules are for clarification.
Greater Bank is one example of a provider that allows grandparents to open an account on behalf of their grandchildren, with its Life Saver account. The bank says that this account can help children start good habits early, and see the rewards of savings as their balance grows each month with interest.
How do you open a bank account for a grandchild?
For banks that allow grandparents to open a bank account for their grandchildren, you’ll likely need to take along some identification and other details when opening the account. This may include the child’s birth certificate, passport and proof of a residential address.
You may need to visit a branch in order to be able to open the account, but some providers may allow for online or phone applications. The process may also vary depending on whether you are an existing customer of the bank or not.
You may wish to enquire with your own bank initially about whether it will allow you to open an account for your grandchild, but also consider checking with other providers so you have some options to select from.
Be sure to enquire about the age at which your grandchild needs to have an adult act as the signatory to transact on the account (for example, to permit withdrawals). With some banks, this can be age 10 or under, while for others, a signatory may be needed if the child is aged up to 14. If you plan to be the account signatory, you will also need to provide personal ID such as a driver licence to open an account for your grandchild.
What to look for in a bank account for grandchildren
Factors that are worth considering in a child’s bank account to help nurture sensible money habits can include:
Zero account-keeping fees
Young children may only have small balances in their bank account, and this can be quickly eaten up if there are high fees. There is no shortage of junior savings accounts that come with zero account keeping fees, so this is definitely something to consider.
A rewarding rate of interest
Youngsters can earn impressive rates of interest on their savings and often higher rates than those available on savings account for adults. This can make it worth shopping around to find a bank account that helps your grandchild benefit from a high rate of interest.
Simple conditions
One of the benefits of setting up a bank account for grandchildren is the opportunity it provides to have relaxed conversations around money and how to grow savings. These simple chats can become more complex if children need to meet a variety of terms and conditions in order to earn a decent rate of interest.
Just as with grown-up savings accounts, junior savers can be asked to make monthly deposits up to a set value to earn the maximum return. While these sorts of conditions can encourage your grandchild to save regularly, it pays to be sure any conditions are achievable and not too stringent, so that your youngster doesn’t lose their motivation to save.
Limits on balances that earn interest
While some kids may build only modest savings, it’s entirely possible that over time your grandchild could grow a substantial balance through a combination of pocket money, cash gifts and interest earnings.
The catch is that some banks may only pay a high rate of interest up to a limit. As a hypothetical example, if the account balance reaches $5,000, a bank might only pay the upper interest rate on any savings up to that amount and apply a lower rate on anything above it.
How does tax work with children’s savings accounts?
One further issue to be aware of is that children can face high rates of tax on investment income – and this includes interest on savings accounts.
The Australian Taxation Office (ATO) states on its website that if an adult both provides the money for a child’s savings account – and spends the cash as they choose, any interest income earned on the account must be included in the adult’s annual tax return.
Where that’s not the case, children can earn up to $120 in interest annually before the bank is required to withhold tax on interest earnings, according to the ATO.
If your grandchild is aged under-16, and earns between $120 and $420 in interest each financial year, you need to provide the bank with details of the child’s date of birth or a tax file number (TFN) for the youngster. Without this information, the bank may withhold tax on any interest earned at a rate of 47%, and your grandchild will need to lodge a personal tax return (probably with mum and dad’s help) to claim a refund of this tax.
It’s worth pointing out that on a savings account earning 3% interest, your grandchild would likely need an account balance of around $4,000 to earn $120 in annual interest. If your youngster is coming close to the threshold, it may be worthwhile applying to the ATO for a TFN for the child – there is no minimum age limit for TFNs. Make sure you record your grandchild’s TFN carefully and share it with his or her parents as this number should stay with the child for life.
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.
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