The Young Saver account from Coventry Building Society can be opened in one of 64 branches only, but it can be managed in branch, by phone (from age 11) and online from the age of 16.

Children can open the account in their name, supported by an adult who confirms the child is capable in operating the account themselves. For withdrawals (maximum £100 daily) they need to confirm the cash is solely for the child’s benefit.

A maximum of £200 can be deposited into the account each month, while a maximum of £5,000 can remain in the account at any time.

There are activity packs and rewards for the child to help them learn about saving and money management. Internal transfers and electronic payments are allowed but only to an account in the child’s name.

When the child is 18, the account becomes an adult account known as the Easy Access Saver.

The launch of the account comes as research from the Coventry revealed that a quarter of primary school-aged children were unable to spot a 50p coin when asked.

One in five children aged between seven to 11 also couldn’t point out a 10p piece while a quarter didn’t know how much change they would receive if buying a 75p chocolate bar with a £1 coin.

The mutual hopes that kids will open the saver with coins or notes to get them familiar with handling money.

Jonathan Wilson, savings manager at Coventry Building Society, said: “The way people interact with money has changed. With the increased use of contactless payments and online shopping, fewer young children have experience of watching or taking part in money exchanges that involves cash and coins.

“We recognise the importance of introducing financial knowledge and awareness in young children. Through Young Saver, we aim to support the learning process about money matters, getting kids more familiar with cash and coins and developing good savings habits.”

How does it compare to other children’s savings accounts?

For easy access accounts, HSBC also pays 5% on its HSBC My Savings account for children aged seven to 17 but this account has an overall maximum amount of £3,000. On any money over this amount they will earn 1.6% interest. It can be opened with £10 and there is no maximum balance.

The next best easy access account comes from Yorkshire Building Society with its One Day Account which pays 4.3% interest on balances of between £10 and £1m.

There’s also the option of opening a fixed rate account, where withdrawals aren’t allowed until the account matures. These pay a slightly higher rate of interest but money can’t be accessed early.

As an example, Halifax offers a 12-month Kids Monthly Saver account paying 5.5% interest. Between £10 and £100 can be deposited each month.

There is also the option of a Junior ISA although any money kept within one can’t be accessed until a child turns 18.