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2018's Best Savings Accounts for Kids

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by Chris Thompson Updated

Finding the Best Kids Savings Account in 2018

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.

Bank APY Minimum Deposit Highlights
Alliant Credit Union Alliant Credit Union logo Read More 1.60% $5
  • Best Savings Account for Kids Under 7
  • Great APY with virtually no minimum deposit
Capital One Capital One logo Read More 1.00% $0
  • Best Savings Account for Kids Between 7 and 12
  • No fees or minimum
Justice Federal Credit Union Justice Federal Credit Union logo Read More 2.78% $500
  • Best Savings Account for Kids Over 12
  • Very high introductory APY
Citizens Bank Citizens Bank logo Read More 0.05% $25
  • Best Savings Account for Kids Bonus
  • Large bonus at child's 18th birthday
BECU BECU logo Read More 0.10% $0
  • Best Savings and Checking Account Combination for Kids
  • Very high APY on first $500 you deposit
PNC Bank PNC Bank logo Read More 0.01% $25
  • Bank With the Best Financial Learning Tools
  • Low minimum opening deposit

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.

If you're interested in saving money, consider opening up a CIT Savings Account. Earn over 8 times the national average with a 2.25% APY on balances of at least $25,000 OR monthly deposits of $100 or more with an initial $100 minimum deposit.

Best Savings Account for Kids Under 7: Alliant Credit Union Kids Savings Account

Alliant Credit Union

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 an $100 average daily balance won’t be eligible for the 1.50% 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, and instead, your kid 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 Between 7 and 12: Capital One Kids Savings Account

Capital One 360

All Capital One Kids Savings account holders earn interest at a 1.00% APY, regardless of how much money is in their account at any particular time. Though not the highest rate on this list, it is more than 10 times the national APY average for kids’ savings accounts. There are also no monthly maintenance fees associated with this type of account, keeping hard-earned allowance money in your child’s hands.

Although this account would presumably work for any kid under 18, its features are clearly suited for those in their pre-teen years. This is especially true for any children who are starting to earn money on a regular or semi-regular basis and want a simple way to deposit it. The automatic savings plan is one of the main benefits of this account and perfect for such a situation. The program sets children on a deposit schedule that enables them to send in their regular allowance as often as they’d like.

If you want to add to your child’s savings, Capital One will allow you to make a transfer up to six times a month. You can do this through Capital One’s mobile banking app, which is also available for kids while including parental controls. As a parent/guardian, you’ll receive your own login and PIN to the account, so you can keep an eye on where things are at all times.

Best Savings Account for Kids Over 12: Justice FCU Grow With Me®

Justice Federal Credit Union

A child’s first year with a Justice FCU Grow With Me® account will earn him or her an outstanding 4.47% APY. Following those 12 months, that APY will fall to 2.78%, though that’s still significantly better than what you’d find almost anywhere else. With these interest rates, the more money that’s in the account initially, the better, as your child will really be able to rack up interest during these times. You will, however, need a minimum of $500 to deposit in the account when it’s opened.

Just in time for college, the account will automatically turn into a Student Rewards checking account when the account holder turns 18. These accounts have no monthly fees and come with a Visa debit card to take away to school. Your child can even earn rewards on his or her debit spending, with redemptions available for travel and merchandise.

Because Justice FCU is a credit union, you need to be a member to get an account.  Fulfill any one of the following, and you will qualify to open a Grow With Me® account:

  • You are a current or former employee of a qualifying government department, government contracted company or other eligible company
  • You are an immediate family member of a member
  • You receive a referral as a relative, friend or coworker of a member

Best Savings Account for Kids Bonus: Citizens Bank® CollegeSaver®

Citizens Bank®

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 rather insignificant $25 minimum opening balance. By contrast, waiting until your kid is between six and 12 will push the minimum opening balance up to $500. Either way, there are no monthly fees associated with this account. The account will also earn interest at a below average 0.05% APY, the weakest trait of the CollegeSaver® offer.

The Steady Save® program makes growing your child’s account easy. You can utilize this to transfer funds on an automatic schedule between the CollegeSaver® account and your personal checking account. You have final say as to the frequency of these transfers.

Best Savings and Checking Account Combination for Kids: Boeing Employees Credit Union Early Saver Account

BECU

The Boeing Employees Credit Union (BECU) Early Saver Account isn’t a stand-alone offering. It’s paired with a free checking account that both kids and their parents can use, giving this credit union the most complete set of kids’ banking accounts of any financial institution on this list. Because of this, children are likely to get a very full experience of what’s it’s like to manage finances, both on a long- and short-term scale.

Once your child turns 13, he or she will even gain access to BECU’s free online banking service. But the real break occurs when your child turns 18, resulting in an upgrade to a Member Advantage® account. This is essentially an adult version of the Early Saver Account, featuring a free debit card, partial out-of-network ATM fee refunds and other benefits.

BECU applies a 6.17% APY to the first $500 you deposit in an Early Saver Account, which translates to nearly $31 in interest. Any money invested past that amount receives a 0.10% APY. While that’s above the national average, it’s actually one of the lesser rates on this list.

Becoming part of BECU isn’t as restrictive as it might seem. In fact, you can meet any of these requirements to garner membership:

  • You are a current or past Boeing or Boeing subsidiary employee
  • You are a Washington resident who works, worships and/or attends school in the state
  • You work or live in various eligible counties in Oregon
  • You belong to the University of Washington Alumni Association

Bank With the Best Financial Learning Tools: PNC 'S' is for Savings®

PNC Bank

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.

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Best Places to Save

SmartAsset’s interactive map highlights the places in the country where people have the opportunity to save money. Zoom between states and the national map to see the best places to save.

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Rank County Median Household Income Cost of Living Purchasing Power Estimated Tax Rate

Methodology Where you live can have a big impact on how easy it is to save money based on several regional factors. Our study aims to find the most suitable places for people to save based on median household income, average living expenses and income tax burden.

First, we calculated the average cost of living in each county for a household with two adults (one working). We then created a purchasing power index for each county. This reflects the counties with the highest ratio of household income to cost of living.

To better compare income tax burdens across counties, we applied relevant deductions and exemptions before calculating federal, state and local income taxes for a family making $50,000 annual income in each location. Next, we created an effective tax rate index for each county, which reflects the counties with the lowest ratio of income taxes to the assumed $50,000 annual income.

Finally, we calculated the weighted average of the indices to yield an overall best places to save score. We used a three-fourths weighting for purchasing power and a one-fourth weighting for tax rates. We indexed the final number so higher values reflect places that are better to save.

Sources: US Census Bureau 2016 5-Year American Community Survey, MIT Living Wage Study