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The HSBC MySavings account is offering 4.25 percent with interest calculated daily and paid into the account monthly. The higher interest rate applies to balances below ÂŁ3,000 with balances above this amount getting a 1.6 percent rate of interest.
This means if a person deposited ÂŁ1,000, after 12 months the balance would be at ÂŁ1,042.50.
The account is open to people aged between seven and 17 and is intended to help young people learn to âhandle money wiselyâ.
Once the account holder turns 11, they will be able to manage the account online and using mobile banking.
Lucinda OâBrien, personal finance expert at money.co.uk, spoke about the benefits of the account.
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She said: âFrom the age of 11, your child will be able to access online and mobile banking and theyâll receive a debit card so they can withdraw and spend money in shops.
âThe account can be set up with as little as ÂŁ10, which is a great way to start saving some pocket money.â
Account holders under the age of 11 get a Cash Book, which they can use to pay in and take out money in branch.
If they want to take out more than ÂŁ50 or move money over this amount into another account, they will need their parent or guardianâs permission.
The base rate is currently at 4.25 percent with some analysts predicting it will go up again. The central bank has continually upped the rate in efforts to tackle inflation, which remains high, at 10.1 percent.
Inflation is expected to drop over the course of the year meaning now could be a good time to switch.
Ms OâBrien said previously: âIf anyone has a lump sum to save, now might be the time to snap up these savings rates before the expected drop in inflation.â
She said interest rates on savings accounts are âstallingâ and not changing as dramatically week on week as they have been previously.
Sarah Coles, head of personal finance at Hargreaves Lansdown, recently told Express.co.uk what savers can do to make sure they get the best return on their savings.
She said: âFor variable rates, incremental changes really add up over time. If you havenât switched easy access accounts for some time, itâs worth checking what else is out there, because you can currently make more than 3.25 percent.
âYou could wait for rates to peak before doing this, but if your money is in an unrewarding high street account in the interim, you risk missing out on significant interest in the interim.â
The savings expert added: âThe trouble is that you wonât know youâve reached the peak until it has passed and is on the way back down.
âInstead, itâs worth looking at the best rates available today, and deciding whether youâre happy to fix.â
