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Can I open a savings account for my grandchild?

The bond grandparents have with their grandchildren can be a very special one, so it’s hardly surprising that many grandpas and grandmas want to put money away for their grandchildren to use in future. But can grandparents open a savings account for a grandchild? Find out below.
Grandad and grandchild sitting on wall facing beach
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They say it takes a village to raise a child, right? And when you have a baby, your friends and family will typically rally round to help in any way they can.

This could be by passing down any baby clothes they have sitting in cupboards from their little ones, keeping an eye on your baby while you catch up on some much-needed sleep (which can be pretty absent in those first few years of their life), or even just being there to listen and offer advice.

But babies aren’t babies for long, so your loved ones may want to continue to help out as they grow by putting cash away for their future.

We all know that having children isn’t cheap, and life is only getting more and more expensive as the years go by – so your child may need all the help they can get when it comes to finding the money to go to university or get on the properly ladder (and if you do want to find out how to help your child buy a property, the good news is that we’ve written a handy blog on this).

Plus, due to the special bond that grandparents can have with their grandchildren, many will want to put some money away to help them with these costs and may be wondering what the best way to do this is. So, what are their options?

Whether you’re a grampy or granny who wants to know if opening a savings account for a grandchild is possible, or you’re someone who is researching this topic on behalf of a parent who wants to start saving money for your little one, here is some useful information to know about savings accounts for grandchildren in the UK.

Can grandparents set up savings accounts for grandchildren?

Now, this is a tricky question because the answer isn’t a definitive ‘yes’ or ‘no’. This is because some savings and investment accounts for children (such as Junior ISAs) can only be opened by the parent or legal guardian of the child, though in some cases, family members (such as grandparents) can pay into these accounts – but we’ll talk more about this later.

Despite the fact that grandparents can’t open a Junior ISA for their grandchildren, one great thing about them is that anyone who pays into them could take advantage of the yearly ISA allowance for Junior ISAs (which has an annual allowance of £9,000for the 2024/25 tax year, although this may be subject to change in future..

This means that the child who owns the Junior ISA won’t pay tax on any interest or gains they make on the money that’s been paid in for them. However, it’s important to remember that with all investing your capital is at risk, so the child could get back less than what was invested.

Grandparents can actually open a savings accounts for their grandchild through a non-ISA children’s savings account that are offered by a number of banks and building societies.

To open these types of saving accounts for a grandchild, the grandparent would typically just need to provide proof of identity, such as a birth certificate. It’s also handy to note that the interest on a child’s savings account won’t be taxed if the money comes from a grandparent.1

What type of savings accounts for grandchildren are available?

When it comes to choosing the best savings accounts for grandchildren, there are a few types available when it comes to both general children’s savings accounts (that can be set up by a grandparent) and Junior ISAs (which they can contribute to when it’s been set up by a parent or guardian). We’ll go into more detail on these below.

Children’s savings accounts

In the UK, ‘general’ children’s savings accounts with a bank or building society can be started with as little as £1, and they can be set up on a behalf of a parent, guardian, or grandparent of a child if they are under 18.2

Unlike a Junior ISA (which can only be accessed by the child on their 18th birthday), general children’s savings accounts can be managed by the child when they reach the age of 7.

In some cases, the child can also take the money out whenever they want – so that is something you might want to take into consideration if you’d prefer for their savings to gain interest over a number of years, or you want your grandchild to have access to the money as and when they need it.

For example, you might want them to put it towards the deposit for their very first home or use it to help fund the costs of going to university. However, if you were just looking for somewhere for your grandchildren to keep their pocket money for sweets, a general children’s savings account could be an option to consider.

If you’re a grandparent planning on opening a general savings account for a grandchild, or you have parents that want to open one for your kid, there are two main types available:2

Instant access (or ‘early access’) – As the name suggests, you or your child can withdraw the money whenever you want, and you’ll usually get a lower rate of interest compared to other types of children’s savings accounts.

Regular savings – These are designed to encourage children to save a certain amount each month and will run for a specified amount of time – such as 12 months. They typically pay a higher rate of interest than instant access/easy accounts, but if the money saved in this type of account is withdrawn early, then the amount of interest you get may be reduced.

It’s important to remember that with traditional children’s savings accounts, the parent may need to pay tax on the interest gained.

This is because if money in the account from a parent generates over £100 in interest, they will need to pay tax if it’s above their own Personal Savings Allowance.

This is not the case if the interest is gained on money deposited by a grandparent, though – as the interest on money paid in by them is tax-free.3

Junior ISAs

ISAs are Individual Savings Accounts, where the UK government allows you to save or invest tax-efficiently for yourself and your children from the moment they’re born up until they turn 18, and can gain access to their Junior ISA. This means that any gains your child makes on their savings (whether this is interest or dividends) won’t be subject to tax.

As we’ve already explained, in the UK there’s a yearly ISA allowance of how much people can save or invest in different types of ISAs – including Junior ISAs (or ‘JISAs’, as they’re also called) for their kids. For Junior ISAs, this annual allowance currently stands at £9,000 for the 2024/25 tax year, although this may be subject to change in future.

A JISA belongs to the child, and unlike traditional children’s savings accounts, the money can only be accessed by them when they turn 18.

There are two types of Junior ISAs that a parent can open for their little one:

  • Junior Cash ISAs – This is similar to a bank or building society savings account as your child’s savings will be able to gain interest. Your child won’t need to pay tax on any interest gained.
  • Junior Stocks and Shares ISAs – This type of JISA will allow you to invest your child’s savings in the stock market and give them the potential to grow further. They also won’t have to pay tax on any gains they may make from their investments.

With a Junior Stocks and Shares ISA, it’s important to remember that because your money for your child is being invested, they could get back less than was put in as stock markets can go up and down.

If opening a savings account for a grandchild is something you want to do, unfortunately, only the child’s parent or guardian can open a JISA for them. However, many providers (like Wealthify) give family members and friends the option to contribute too.

At Wealthify, we offer a Junior Stocks and Shares ISA which can be started with just £1.

Our team of experts take care of all the investment decisions, and you can pay in as much as you like, as often as you like.

Anyone you invite to be a contributor to your child’s Junior ISA (such as their grandparents) can also choose to pay in regularly (for example, on a monthly basis) or just as a one-off – such as for a birthday or Christmas present that has the potential to keep on giving.

How can I invest savings for grandchildren?

As we’ve already explained, you can invest for your grandchild with a Junior Stocks and Shares ISA if the one they have allows people other than the child’s parents to contribute to it (although they will still need to be the ones to set up the JISA for them).

If the interest rate that is paid by a savings account or Junior Cash ISA is lower than the rate of inflation, the value of your (or, in this case, your child or grandchild’s) savings could decrease over time. With a Junior Stocks and Shares ISA, your returns will depend on how well your investments perform. With Wealthify, it’s extremely easy to contribute to your grandchild’s Junior ISA.

The parent just needs to invite you to become a contributor, and we’ll send you an email for you to confirm that you want to pay into the JISA. You can then choose to deposit as much or as little money as you like, as and when it suits you. Yep, it really it as easy as A, B, C.

Want to see if you could help your child or grandchild’s savings go further with investing? Find out more about our award-winning Junior ISA and how others can chip in with new Friends and Family JISA Contributions.

The tax treatment depends on your individual circumstances and may be subject to change in the future.

With investing your capital is at risk and your child could get back less than invested, and less than what you or any contributors have invested.

Wealthify does not offer financial advice. You should seek financial advice if you are unsure about investing.


  1. https://www.thetimes.co.uk/money-mentor/article/save-invest-grandchildren/
  2. https://www.moneyhelper.org.uk/en/savings/types-of-savings/saving-for-your-children
  3. https://www.gov.uk/savings-for-children
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