“Best Savings Accounts for Kids”
Best Savings Accounts for Kids: As a parent, you want the best for your child, and that includes preparing them for financial success. One of the best ways to teach kids about money is by opening a kids’ savings account. Not only does it help them understand the value of saving, but it also gives their money a safe place to grow.
But with so many options, how do you choose the best savings account for kids? Don’t worry—we’ve got you covered! In this guide, we’ll break down everything you need to know, from how these accounts work to the best options available today.
Why Open a Savings Account for Kids?
Before we discuss the best options, let’s talk about why a kid’s savings account is a great idea:
1. Teaches Financial Responsibility – Kids learn how to save, keep track of their money, and set goals.
2. Earns interest – Even a small amount of interest helps grow their savings over time.
3. Safe and secure – Unlike a piggy bank, a bank account protects your money.
4. Prepare for the future – Whether it’s college, a car, or their first apartment, starting early makes a big difference.
Now, let’s take a look at the best savings accounts available for kids in the US.
Types of savings accounts for kids
Not all savings accounts are the same. Here are the most common types:
1. Custodial savings account (UTMA/UGMA)
- How it works: An adult (parent or guardian) manages the account until the child is 18 or 21 (depending on state laws).
- Best suited for: Long-term savings, like college funds or large purchases.
- Disadvantage: The child gets full control once they are an adult, so they can spend it however they want.
2. Joint Savings Accounts
How it works: Both parent and child are owners, but the parent has control.
- Best suited for teaching everyday savings and money management.
- Disadvantage: Some banks require the child to be at least 13 years old.
3. Youth Savings Accounts
- How it works: Designed specifically for kids, often with no fees and low minimum balances.
- Best suited for: Young children who are just starting to save.
- Disadvantage: Interest rates may be lower than other accounts.
Now, let’s take a look at the best savings accounts for kids based on fees, interest rates, and features.
Top 5 Best Savings Accounts for Kids
1. Capital One Kids Savings Account
- Why it’s great: No fees, no minimum balance, and a fun mobile app for tracking savings.
- Interest rate: Competitive APY (annual percentage yield).
- Best suited for: Parents who want an easy, digital-friendly option.
- Age requirement: Under 18.
2. Ally Bank Kids Savings Account
- Why it’s great: High-interest savings with no monthly fees.
- Interest rate: One of the best rates available.
- Best suited for: Parents who want good interest growth.
- Age requirement: Must be opened by a parent (custodial account).
3. Chase First Banking® (for kids ages 6-17)
- Why it’s great: Comes with a debit card (controlled by parents) and spending limits.
- Interest rate: Lower than online banks, but great for hands-on learning.
- Best for: Families who want to spend and save in the same account.
- Age requirement: 6-17 years old.
4. Alliant Credit Union Kids Savings Account
- Why it’s great: High APY and no monthly fees.
- Interest rate: Above average for a credit union.
- Best suited for: Parents who prefer credit unions over big banks.
- Age requirement: Must be opened by an adult.
5. U-Alliance Financial MyLife Savings for Kids
- Why it’s great: Excellent interest rates and $0 minimum deposit.
- Interest rate: One of the highest interest rates for child-focused accounts.
- Best suited for: Long-term savings growth.
Each of these savings accounts for kids has its own benefits, so choose the one that best suits your family’s needs.
How to Choose the Best Savings Account for Your Child
When comparing the best savings accounts for kids, consider these factors:
✅ Interest rate – Higher APY means more growth over time.
✅ Fees – Look for accounts with no monthly maintenance fees.
✅ Minimum balance – Some accounts require $0, while others may require $25+.
✅ Parental controls – Can you set limits or track spending?
✅ Accessibility – Can you manage it online or through an app?
Tips for teaching kids to save
Opening a kids’ savings account is just the first step. Here are ways to make the most of it:
- Set a savings goal – Whether it’s for toys, sports, or college, having a goal keeps them motivated.
- Match their contribution – Offer to add $1 to every $5 they save to encourage them.
- Track progress together – Use the bank’s app or a simple chart to show progress.
- Talk about money – Teach them the difference between needs and wants.
Final Thoughts: Start Early, Grow Smart
A savings account for kids is one of the best tools to prepare them for financial success. Whether you choose a high-interest online bank or a traditional bank with parental controls, it’s important to start early and make saving a habit.
By choosing one of the best savings accounts for kids, you’re not just saving money, but laying the foundation for a lifetime of smart financial choices.
Have you opened a kids’ savings account yet? Share your experience in the comments!
🔗 For more financial tips, check out:
Happy Savings!
FAQs on Best Savings Accounts for Kids
1. What is the best age to open a savings account for a child?
You can open a kids’ savings account right after they are born (with a custodial account) or at age 6 (with a joint account). The sooner the better to build good habits!
2. Do kids’ savings accounts earn interest?
Yes! The best savings accounts for kids offer competitive interest rates (APY), helping their money grow over time. Online banks and credit unions typically have higher rates.
3. Can my child withdraw money from their savings account?
This depends on the type of account. In custodial accounts, parents control withdrawals until the child reaches the age of majority. In joint accounts, some banks allow children to make withdrawals with parental approval.
4. Are there any fees for kids’ savings accounts?
Many savings accounts for kids have no monthly fees or minimum balance requirements, but always check the bank’s policy before opening an account.
5. What’s the difference between a kid’s savings account and a 529 college plan?
A kid’s savings account is flexible—they can use the money for anything. A 529 plan is tax-advantaged, but it must be used for education expenses. Both are great for saving, but serve different purposes.
