[AUS] Bank account for kids?

[GT]

What are other Aussies using for their kids bank accounts?  The cash has to go somewhere once the money tin is full but the amount isn't enough to buy into an ETF.

My FIL setup an account for my daughter when she was born, with Commbank, a Dollarmites account (one I know Pape has lambasted before).  He didn't ask us before setting this up, so it was a bit of a surprise.  Because we didn't know about it neither my wife or I are signatories on the account, which means we can't check the balance online or over the counter.  This can be alleviated by another visit to the bank with FIL in tow and showing of some ID's.

Anyway, because of this setup I didn't know the bank details and chased down the annual bank statement and it turns out the Dollarmites account pays out 2.79% on money deposited in a month if that money stays in there for the rest of the month, otherwise it's a paltry 0.01%/annum.

So I went looking to find a better deal for her but I seem to be striking out.  CUA have accounts for kids that are 10 to 17 that pays out 4.25% up to $5k balance and she's too young for that, but something to keep in mind for when she is as it's almost double other accounts percentages.

[marty998]

Does Bankwest still have the 10% interest deal for kids? (admittedly it had a very low upper limit for max balance).

Best thing to do is to stick it in a mortgage offset account, and keep a record of what belongs to the kids in a spreadsheet. No tax payable by anyone, better interest rate (effectively), and you can withdraw it and give it to the kids whenever you want.

You may or may not want to teach them how compound interest works, in case you want to pay them a rate in your spreadsheet that is less that what you are saving on your mortgage :D

[GT]

I hope I misread the Commbank details, but either way 0.01% annual is not awesome at all.

Just checked Bankwest and they have a 4.75% Kids Bonus Saver account for under 15's if $25-$250 a month goes in and after 12 months anything over $1 is swept into the linked normal kids account.  Not sure why they'd do the sweep, as all you'd do is transfer back to the Bonus Saver account and start all over again with a bigger starting amount.

Mortgage offset seems like a viable option, just gotta track it.