Santander 123 Mini Accounts for Kids

Written by Karen Bryan

santanderletterheadThere are two Santander 123 Mini accounts aimed at kids. The Santander 123 Mini Current Account offers young people the opportunity to manage their own cash, plus spending with a cash or debit card. It doubles as a savings account, as it pays a variable rate of 3% on balances between £300 – £2,000.

For kids under the age of 11, the  Santander 123 Mini Account (In Trust) allows parents who hold a Santander current account, to earn a variable rate of 3% on balances between £300 – £2,000 set aside for their child. The parent must retain control of the account until the child is 11. Then the parent can visit a branch to transfer the account into a Santander 123 Mini Current Account, where the child will have control of the money.

To maximise the interest earned, I wondered if it would be possible for the both parents to open a Santander 123 Mini Account (In Trust) for a child, then keep both these accounts open until the child reached the age of 18. Then the child could also open a Santander 123 Mini Current Account once they reach the age of 11. However, upon reading the terms and conditions, only one account per child may be held, which may be either the 123 Mini Account (in Trust) or the 123 Mini Current Account (but not one of each).

Being a Santander 123 customer gives the child access to higher rates of interest on some accounts. For example, a variable rate of 3%, compared to the standard 2.5%, is paid on a Santander Junior ISA.

To me, the Santander 123 Mini Current Account looks like a better product. It allows the young person to manage their own spending, use a payment card and get a good rate of interest on their savings. The fact that the parent has to hold a Santander current account in order to open the 123 Mini Account (In Trust) restricts access.