22 Answers

I am looking for setting up a saving account for my 3 year-old. As underage has the tax penalty, what would be a better option?

Posted by Jack, 2nd February 2015

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  • My kids have Dollarmites account through commonwealth bank!just remember to deposit money can be just some change ay least once a month to get interest and they get a cute money box too

  • I use commonwealth bank “dollarmites” for my 3yo. No fees. Just make a deposit once a month so they get their interest built onto their account. And they give you a platypus bank for home. It’s great!!

  • make an appointment at a few banks to ask all the questions and see what they can offer.

  • More to the Bankwest thing… Once you have had the account for a few years and there is some money building up in the general savings, the first month after the transfer from bonus savings to general savings, transfer as much as you can (up to $250) into the bonus account. That way you are going to get more interest quicker. Shhh I didn’t tell you that!

    As for the tax repercussions check out the ATO website for information. Don’t quote me because I cant quite remember but its something like if you are accessing the money then there is tax issues, but if you are not touching the money then there isn’t issues. Best to check the website or call the ATO for proper information.

  • I have Bankwest accounts for our children. Even when I was living in the Eastern states I opened an account for my daughter who was born in the East. Best way to do it is to open a general Kids account and then open a Kids Bonus savings account. Each month you need to deposit at least $25 and no more than $250 into the account. You then get the high interest (cant remember exactly what it is now, but it was the best I could find at the time). Each year on the anniversary of the account, all the money is transferred into the general kids savings account and you start again with the bonus saver

  • Our children have Dollarmite accounts, however we are looking into the Police Credit Union.

  • If an account in a child’s names earns over a certain amount of interest there is tax issues. In the case of a Trustee Account held after your death if the child is young, once the child turns 18 a tax return has to be lodged by whoever the trustee/s is/are responsible. I didn’t know that until I updated my will.

  • I set my daughter up a Dollarmites account with the commonwealth bank. I have full access to her account, I can transfer funds straight from my account to her account or vice versa, I make small monthly payments into the account so it earns interest and I also fill up her money box (which the bank gave her) with my spare change at home and when it’s full I just take it to the coin machine and it goes straight into her account.

  • I always had and now my son has a commonwealth dollermites account.

  • My boys have always had accounts with Police Credit – no cost and I have access to it if required. Slightly higher interest and there have never been any tax implications

  • My partner and I set up an account as trustees for our daughter with ANZ merely because we bank with them. There’s not much difference between the savings accounts/ online saver accounts when the amounts being banked are relatively small (as ours are).

  • I set my babies account with ANZ as that is who I bank with and makes it easier to transfer money across, when i was researching a lot of the interest rates are the same. With the account I set up I believe it needs minimum $10 a month deposit to earn the interest.

  • I’ve found commonwealth bank are the best.

  • Our son’s account is set up as “Dad and mum as trustee for Child” However, in time there can be tax issues if the account is earning a reasonable amount of interest, so if you are in a situation where the account will be substantial, talk to the bank about your options.

  • the government started to tax childrens accounts because parents would put their money in there instead. It would depend on how much you will be putting in. You could set up a trust account which has less penalties but he cannot access it till he is 16. After talking to our bank manager we decide we were better off putting the money into our mortgage then paying it out to the kids we they are older. otherwise you can set up a broker account and buy shares. good luck :-)

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