Finding the Best Savings Accounts for Kids
Teaching your children financial responsibility from a young age can help them reap incredible benefits later in life. Opening a savings account for kids can be one of the first steps in this educational venture.
|First Internet Bank Read More||0.55%||$100|| |
|Alliant Credit Union Read More||0.65%||$5|| |
|Northpointe Bank Read More||1.50%||$0|| |
|Capital One Read More||0.50%||$0|| |
|Citizens Bank Read More||0.01%||$25|| |
|PNC Bank Read More||0.01%||$25|| |
How We Determine the Best Savings Accounts for Kids
For this study, SmartAsset’s banking experts analyzed kids savings account options at more than 70 banks and credit unions. We scored each institution based on their bonuses, annual percentage yield (APY), financial education tools, monthly fees and minimum deposit requirements.
Best Savings Account for Kids Under 7: First Internet Bank Tomorrow’s Tycoons
First Internet Bank calls its kids savings account “Tomorrow’s Tycoons.” The account comes with a 0.55% APY, which ranks in the upper echelon of savings rates for children’s savings accounts. Account owners will not be charged a monthly fee with this account, though there is a $100 minimum opening deposit requirement. Like any savings account, you can only withdraw money from this account up to six times per month.
Although your child will be an actual owner of this account, First Internet Bank requires that you are also added as a joint owner with them. Through this setup, you and your child will be able to check their account’s balance and transaction history through the bank’s extensive online and mobile management platforms.
Ownership of a Tomorrow’s Tycoons account only lasts until your child turns 18 years old. When their 18th birthday arrives, the account will be converted to First Internet Bank’s Free Savings Account. This account currently has a 0.35% APY, no monthly fees and an easy-to-meet $25 minimum opening deposit.
Best Savings Account for Kids Between 7 and 12: Alliant Credit Union Kids Savings Account
The Kids Savings Account from Alliant Credit Union received a near perfect score in our study. Even if your child is young and has no money to put into the account yet, Alliant will start him or her off with $5 to cover the minimum opening balance requirement. However, any accounts that don’t maintain a $100 average daily balance won’t be eligible for the 0.65% APY.
Once your child turns 13, he or she will be able to apply for a Teen Checking Account with Alliant. This won’t replace the Kids Savings Account; instead, your child will maintain both accounts. All checking account holders also get a free debit card they can use to access funds in both accounts.
Parents, grandparents or legal guardians can connect their Alliant account with a Kids Savings Account. This will give you access to the child’s current account balance as well as mobile check deposit. The bank also has a couple financial education programs available so kids can become more self-sufficient with their money management.
Although Alliant is a credit union, it has very lax standards for becoming a member. Fulfill any one of the following requirements and you will qualify:
- You are a relative or domestic partner of a current member
- You are a current or retired employee of one of Alliant’s partnered companies/organizations
- You live or work in communities near Alliant’s corporate offices in Chicago
- You make a $10 donation to Foster Care to Success, a college fund for foster youth in the U.S.
Best Savings Account for Kids Over 12: Northpointe Bank Kid’s Savings Account
Savings accounts for kids and teens are notorious for shrinking interest rates as balances grow in size. And while this is technically the case with Northpointe Bank's Kid’s Savings Account, the drop-off in APY is much smaller and it occurs at higher balances. The account offers kids a 1.50% APY on the first $1,000 of their balance, falling to between 1.12% and 1.50% for balances between $1,000.01 and $9,999.99, and 0.55% and 1.12% for balances of $10,000 and up. That means the lowest APY your child's account will receive is 0.55%, which itself is a better rate than many other accounts.
This account is available to open with any amount of money, so don't feel like your child needs to accrue a certain amount of savings before becoming a joint account holder with you. The only downside to this account is that you cannot open it online. That means you'll need to either visit a Northpointe branch or call the bank's new customer hotline to open an account.
Best Savings and Checking Account Combination for Kids: Capital One Kids Savings Account
Capital One has two accounts that can help your child learn about money management and banking through their childhood and teenage years.
The Kids Savings Account from Capital One offers a 0.50% APY. Your child won’t have to pay any maintenance fees to hold onto this account, nor is there a minimum needed to open it. The account comes with the ability to set up savings goals for your children, as well as an automatic savings plan. This will aid your child in making scheduled, regular deposits to their account. You can even connect your account to your child’s account to simplify the deposit process.
As early as 8 years old, your child will be able to open a MONEY teen checking account at Capital One. While a savings account can help them accrue money, a checking account like this one will show them how to manage and spend it. They’ll receive access to the Capital One mobile banking app and website, along with a free debit card. Again, there are no fees or minimums with this account.
Once your child turns 18, the Kids Savings Account will convert to Capital One’s standard savings option: the 360 Performance Savings Account. This account also made our list of the best savings accounts, as it boasts a significant 0.65% APY. The MONEY teen checking account has a similar setup, as it will turn into a 360 Checking account on your child’s 18th birthday. The account has no fees or minimums and a 0.10% APY.
Best Bonus for a Kids Savings Account: Citizens Bank® CollegeSaver®
Citizens Bank® CollegeSaver® account holders will receive a bonus of $1,000 on the day they turn 18. Interest is included in this payment, and it’s calculated as if the money was in the account from the day it was opened. However, you must open an account prior to the child’s 12th birthday, as children older than that become ineligible.
If you open a CollegeSaver® account before your child turns six, there’s a $25 minimum opening balance, but that minimum jumps to $500 if you wait to open the account when your child is between six and 12 years old. Either way, there are no monthly fees associated with this account. The account will also earn interest at a 0.01% APY; this low rate is the primary downside of the CollegeSaver® offering.
Note that Citizens Bank does have minimum monthly deposits for this account. If your child is 6 years old or younger, the minimum monthly deposit is $25. But if they're 6 to 11 years old, the minimum deposit jumps to $50.
Bank With the Best Financial Education Tools: PNC 'S' is for Savings®
What the PNC Bank 'S' is for Savings® account lacks in APY and other financial perks it more than makes up for in children’s tools for learning about the management of finances. This begins with an interactive online banking program that includes help from Sesame Street to teach children financial lessons and tips. This experience is centered around three financial focal points: saving, sharing and spending.
There is no cap on the number of deposits you can make with an 'S' is for Savings® account. This is pretty rare around the kids banking sphere and will allow the account to grow as much as possible in as short as possible. But for those who might want some help building their savings, PNC has created the Auto Savings system so recurring deposits are made at specific times.
It only takes $25 to open an 'S' is for Savings® account, making it a feasible option for just about anyone. There’s also no monthly fees on the account if the child is younger than 18, although that changes past that age. If you’re over 18, PNC will charge a $5 monthly fee, unless you make automatic transfers of at least $25 a month or can manage to hold a $300 monthly balance. If you meet either of these requirements, PNC will waive the fee.