Money Saving Expert Martin Lewis discusses top bank accounts for children

Martin also told parents which method not to bother with

Martin Lewis has explained the best way parents can save cash for their young children.

Speaking on This Morning, Martin told Holly and Phil the best bank accounts for children - as well as warning them of the ones to avoid.

Martin told viewers they should get their children involved in their finances as soon as possible - educating them about the concept of money and interest rates.

Speaking about the best account for savings Martin said: "On interest, the easy winner is the Halifax Kids' Regular Saver (up to age 15), which pays 4.5% AER fixed for a year.

"You can only pay in between £10 and £100 per month. You are allowed to miss months, but can’t withdraw any money until the year is up.

"You can open and access it online or in branch. After a year, the rate drops, so get your child to set a diary reminder and move their money to a better account when it does.

"If you need another, Saffron Building Society is similar but pays 4% AER and you can make withdrawals from it, though you can only open and manage it in branch or by post."

For larger sums Martin advised to use the HSBC My Savings account which pays 3% AER on up to £3,000.

If children are aged 11-18, the Santander 123 Mini account pays 3% on £300-£2,000 and gives a contactless debit card to use in shops. But if your child is under 13, you need to have a Santander current account and open it for them in branch.

Speaking about whether Junior ISA's are worth opening Martin said: "The big benefit has always been that the interest is tax-free, but unless your children have big earnings or enormous savings their money isn’t taxed anyway, so there’s no gain.

"There’s a rule that says kids’ can only earn £100 interest a year (so that’s about £3,000 saved in the top easy-access account) from money given by each parent.

Above that it’s counted as the parents’ income and taxed at their rate – though as most parents don’t pay tax on savings any more either (unless they’re higher rate taxpayer or have a shed load) that isn’t such an issue either.

"The only reasons for using a Junior ISA is as a way to lock money away until they’re 18 – or to earn a little more on lump sums. The top top-paying JISA cash accounts is from Coventry BS paying 3.6% AER."

Martin also warned about putting cash in Premium Bonds, saying it was very unlikely that children would win on them regularly.

*This Morning continues at 10:30am on ITV tomorrow