Savings account for a 16 year old with first job

[earlydoors42]

Hi, my 16 year old has just got a part time job. I've said she should save some of her wages into a savings account separate to her current account. Can anyone advise what sort of account would be best please? Nothing as long term as a LISA but I think non-instant access would be ok. Thank you.

Santander 123 offers decent interest if you can get it to £1000, £1500. If you can, then your DC could switch the amount over into a Lifetime ISA, for deposit or similar.
Set it up and leave it alone / cut up the card.

It's really up to her. I doubt she is earning very much part time at sixteen. You can make suggestions but then leave it for her to decide what to do.

Unless she still qualifies for 'child' interest rates due to her age, which is unlikely and likely to run out soon anyway, whatever's most convenient.

Maybe some sort of regular saver? Natwest do one that pays 3% on up to £50 a month but you need the current account to qualify.

But if she's only saving a few hundred or small number of thousands, the interest you get is pretty much nothing whichever account you have. Eg if you save £1000 and put it in a notice account to get the best rate of around 1%, that's a whole £10 a year in interest.

Probably more beneficial to just get in the habit of saving and seeing her money grow and talking about how small changes in spending habits can make a huge difference in how much she can save over time.

Eg a £3 coffee 5 days a week adds up to hundreds of pounds over a year, that would pay for a holiday.

Thank you all. I will look to see if she gets the child ISA rates as it's a year and a half before she's 18.

She might be earning quite a bit over the summer as she is free from end of May until Sept and has a waitressing job in a nice restaurant with tips.

Yes it's up to her but she wants guidance. She offered to pay board and I said she should save some of her wage instead (a %) as otherwise it will all go to Primark and B&M Bargains!

HSBC children's current account and savings account pays 2.5% at the moment.

www.hsbc.co.uk/current-accounts/products/children/

Tsb under 19 account has an OK rate and the advantage of not shifting to a "normal" account (ie rubbish rates) until they hit 19. I'd suggest a santander 123 and the under 19 account. Use one for wages to go into and then siphon off some for savings to the other. That way they should get interest on both pots while keeping them separate.
Kids current accounts have better interest rates than most savings options at the moment. Take a look at money saving expert too. I think HSBC also have an under 18 account with a good rate.

If the money can be locked away for a couple of years, look at Junior ISA. That is in her name, in her control (as is aged 16+) At age 18 it can be converted to an ISA or the money could be taken out and up to £4k could be put in a LISA. I don't know of any provider who does a JISA to LISA transfer but you never know it may be possible.

Ah brilliant thank you. A few options to explore. Her first shift is Friday so will get something in place.