Opening a savings account for your child is one of the best ways to teach them financial responsibility. With the right savings account, you can provide hands-on learning, online tools, great interest rates, and zero fees. This comprehensive guide covers everything you need to know about the best kids’ savings accounts available.
What is a Savings Account for Kids?
A child savings account is a bank account designed specifically for those under 18 years old. The accounts promote saving from an early age through features like:
- High interest rates – Competitive rates to show the power of compound growth
- Low minimum deposits – Typically $0 to $100 to remove barriers to entry
- No monthly fees – Avoid nickel and diming kids as they learn
- Educational tools – Games, courses, and tips on money management
Savings accounts make great alternatives to old-fashioned piggy banks. They bring bank interest, tracking, and security to the table.
With the right account, you can set your kid up for financial success down the road. But first, let’s explore the main options at your disposal.
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Types of Kids’ Savings Accounts
You can open savings accounts for minors at traditional brick-and-mortar banks, online banks, and credit unions. The three main setup options include:
Joint Savings Accounts
Joint savings accounts list both the child and parent as co-owners. This allows the adult to monitor balances and transactions while the child learns. Once they turn 18 or 21, ownership transfers fully to them in most cases.
Joint accounts provide the most flexibility for parental oversight in the early years.
Custodial Savings Accounts
Custodial accounts also have an adult listed as the custodian. But the child is listed as the sole actual owner. The adult manages the account on their behalf until they reach the “age of majority” – 18 to 25 years old depending on state law.
Custodial accounts make clear that the funds fully belong to the child. But they have more adult control than joint accounts in some cases.
Teen Checking and Savings Accounts
Once kids become teenagers, some banks allow them more independence. Separate teen checking accounts and linked teen savings accounts give them more hands-on control.
However, they still require a parent or guardian to be a joint account holder in most cases until they turn 18.
7 Best Savings Accounts for Kids and Teens
Now let’s explore 7 of the top savings accounts tailored specifically to those under 18.
1. Greenlight Debit Card for Kids – Best Overall
The Greenlight debit card for kids, teens, and pre-teens aims to make money management a breeze. Parents can pay and manage chores through the platform while kids save flexibly and spend intelligently.
Here’s a quick overview of the main perks:
- Earn up to 5% back on savings stored in Greenlight accounts
- Flexible parental controls – Manage chores, allowances, and spending
- Educational resources abound in the mobile app
- Three tiers of service from $4.99 to $9.99 to $14.99 per month
With rewards for saving built-in and tons of customizable management features, Greenlight brings serious value. The only major downside is the monthly cost.
2. Step Teen Checking Account – Excellent for Teen Banking
Parents looking to equip teenagers with hands-on banking practice need look no further than Step. Their mobile-first account includes:
- 5.00% APYÂ on balances – Far higher than most kids’ savings rates
- Fee-free overdraft up to $100 to prevent mistakes from being too costly
- No minimum balance requirements
- Step Visa Card to spend like a debit card
With the power of a debit card and interest rates similar to leading high yield accounts, Step lets teens hit the financial ground running.
3. Copper Kids Debit Account – Fun Way for Kids to Save Automatically
Copper appeals primarily to the under 13 crowd with their colorful debit card. Features like Savings Jar automatically round up purchases to set aside a little extra.
Additional details on Copper:
- Link to parent’s account for oversight
- Up to 5% “Savings Rewards” based on consistent saving patterns
- Photo debit card to show off your child’s creativity
- $4.95 monthly fee – Lowest tier among paid kids’ accounts
The set-it-and-forget-it savings bonus schemes make Copper stand out from the pack.
4. Capital One Money Kids Savings – Solid Bank Account Option
As a full-service traditional bank, what does Capital One bring to the table for kid savers? Plenty, including:
- Link multiple kids’ accounts to one parent login
- 2.30% APYÂ – Far higher than average kids’ savings rates
- No minimum balance requirements
- Create customized savings goals buckets
- Monthly statements to track progress
With leading interest rates and easy goal segmentation, Capital One Money Kids helps teach well-rounded money lessons. The lack of monthly fees doesn’t hurt either.
5. TD Bank Youth Account – Top Traditional Bank Choice
TD Bank allows kids as young as 13 to open full Youth Checking accounts. The companion savings offering boasts:
- Earn 0.40% APYÂ on all balances – Higher than many brick-and-mortar bank rates
- No monthly fees charged
- Visa debit card to spend in person, online, or via mobile wallet
- Account transition guidance as your teen approaches 18
TD Bank stands out from competitors by extending robust teen banking options typically reserved for those 16 and up. That gives extra years to establish healthy habits.
6. Alliant Credit Union Youth Savings – Excellent Credit Union Offering
Alliant Credit Union pays an outsized 3.10% APY on their basic Youth Savings account. Additional perks include:
- No monthly fees
- Initial $5 deposit requirement waived
- Access to over 100,000 fee-free ATMs
- Plain and simple savings for those under 22
As a credit union, you or your child must become a member to open savings. But in return, Alliant pays exceptional rates reserved for the very best online savings accounts.
7. Axos Bank High Yield Savings – Top Online Savings Account
In addition to their industry-leading interest rates for adults, Axos Bank offers a top-tier High Yield Savings account to minors as well. Benefits include:
- 1.81% APYÂ on all balances – Far better than typical kid options
- Link to parent account for oversight
- Easy set up as an online bank
- High yield savings at a young age
While their rates can’t match specialized kids’ accounts, the head start in earning high variable interest gives young savers a nice foundation. No monthly fees contribute to the value.
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Factors To Consider When Opening a Savings Account
As you compare your options, keep the following key factors in mind:
Interest Rates and Account Yields
While kids’ account rates best standard savings accounts, they still pale in comparison to the best high yield savings products. The focus lies more on education rather than earning maximum interest early on.
Minimum Opening Deposits
Many children’s savings accounts allow $0 minimum opening deposits. Some require $5 to $100 to start. Know the opening deposit rules when comparing choices.
Monthly and Maintenance Fees
Avoid any extra fees cutting into your child’s balances when possible. Most kids’ savings products skip the fees but always good to confirm.
Educational Tools and Parental Management
The extra tools and oversight controls vary widely across children’s accounts. Identify the right approach for your needs.
When To Open a Savings Account for Kids
You can open most basic savings accounts as soon as your child receives monetary gifts for birthdays, holidays, etc. Actual minimum age limits depend on the institution but are often around 4 to 5 years old.
Custodial accounts carry similar age range restrictions in most cases. However, teen checking accounts generally require new account holders to be at least 13 years old.
The earlier you start, the more compound growth potential!
Do Savings Accounts Help Teach Kids?
Absolutely! Hands-on banking, earning interest, setting/tracking goals, and resisting spending urges provide lifelong lessons.
Arguably the educational value matters more than the nominal interest earned in a child’s formative years. Digitally tracking their hard-earned dollar amounts via mobile helps concepts click better than old analog methods.
Can Kids Check Savings Balances and Activity?
In most cases, yes. Joint account structures and additional login credentials empower kids to monitor balances. Many leading options provide companion mobile apps catered specifically to users under 18.
Glimpsing their hard-earned savings grow digitally builds healthy money habits. Account activity empowers tracking their progress on saving goals too.
Do Parents Have Account Access Too?
Yes, parents and guardians often serve as account co-owners in joint savings accounts for dependents. This allows them to track balances and transactions right alongside their child.
Many savings accounts catered to minors also allow linking to an existing parent checking account. This streamlines money transfers in or out when needed.
Can Kids Access Savings Account Money?
Access varies depending on account structure and age. Most savings accounts come with ATM cards for easy withdrawals. Some feature customized prepaid debit cards to double as spending vehicles.
Teens may enjoy even more flexibility depending on the account. But parental oversight typically continues in some capacity until they turn 18 years old.
Start Building Towards Financial Success Today
As you can see, kids’ savings accounts bring fantastic benefits within reach. Now that you know what to look for, why not start building your child’s money management skills today?
Even small consistent deposits can work wonders over time thanks to compound growth. Each digitally tracked contribution builds real-world knowledge and lifelong habits.
Compare your leading choices head-to-head using this guide. Pay special attention to monthly fees, management tools, interest rates, and minimum requirements.
Then put your money where their mouth is by opening your child’s first savings account this week! Getting a head start on their finance’s gifts peace of mind for decades ahead.
Frequently Asked Questions
At what age can kids start banking?
Most banks allow joint savings accounts starting around ages 4 to 6. However, teen checking accounts may have higher minimums of 12 or 13 in some cases.
What’s the easiest way for kids to deposit money?
First talk to them about consistent saving from any financial gifts, allowance funds, etc. Then simplify the process with mobile check scanning or debit/credit links to easily transfer their starter funds into savings digitally.
Can kids have debit cards?
Yes! Almost all teen checking accounts include access to true debit cards. Many savings accounts now offer customized prepaid debit cards. Both allow young ones to practice swiping and entering PIN codes to complete real-world transactions responsibly under your watchful eye.
Do kids need to file savings account interest on taxes?
Sometimes. Like adults, anyone reporting over $10 in total interest income across all accounts must file. But for most young savers, that income level remains out of reach early on. Filings kick in once balances swell over time.
Can grandparents open savings accounts for grandkids?
Absolutely! Grandparents often choose to gift savings starter funds to newborns around the holidays. Speak to your bank about “in trust for” custodial account options to establish funds earmarked specifically for your grandchild accessible by their parents in the meantime.