Best Savings Accounts for Kids

Opening a savings account for kids is a great way to teach children about personal finance. The best savings accounts for kids offer low minimum deposits and fees, competitive APYs, and allow parents to keep tabs on their child's spending.

While some savings accounts are specifically marketed as savings accounts for kids, many standard savings accounts will allow you to name a minor as the joint account holder. Check with your bank or credit union about whether you can open a joint account with your child as the co-owner.

Here's our list of the best savings accounts for kids.

How to choose the best savings accounts for kids

To choose the best kids' savings account, these are the factors that matter most:

• Low minimum balance and deposit requirements: Because kids are typically starting with a small amount of savings, look for a savings account with a low minimum opening deposit, as well as a low minimum balance requirement.
• No monthly fees: Fees eat away at your savings, especially when you have a relatively small balance. For that reason, you want a kids' savings account that either doesn't charge a monthly fee or waives the fee for account holders younger than 18.
• APY: Finding a savings account for kids that pays a high APY is challenging at major banks. If you're a member of a local credit union, ask about whether it offers children's savings accounts, as many offer far more competitive APYs.
• Parental monitoring features: To ensure that your child is managing their savings wisely, look for an account that makes it easy to keep track of their activity.
• Educational features: Any account that includes features that teach children about personal finance gets bonus points.

What is a kids' savings account?

A kids' savings account is a joint bank account where someone younger than 18 co-owns the account with an adult who's typically their parent or legal guardian. Many bank accounts allow a minor to be an account co-owner with an adult, but children's savings accounts are marketed specifically as products that are available to people under 18. Many of the best kids' savings accounts automatically convert to a standard savings account once the child turns 18.

How to compare kids' savings accounts

There are many factors to consider when you're choosing a savings account for your child, but here are some of the most important ones.

Monthly fees

Since kids tend to have low savings account balances, avoiding monthly fees is a must. If the account will automatically convert into a regular savings account once your child turns 18, look for an account that also charges minimal fees in its standard savings accounts.

APY

Finding a high-yield savings account for kids is tough, but the higher the APY, the better. If you're a credit union member or you're eligible to join one, ask if it offers a savings account for kids, as the APYs are often way more competitive than you'd get at a major bank. That said, since kids often don't have huge account balances, avoiding fees is probably more important than a high APY.

Minimum opening deposit

One of the most important personal finance lessons is to save a little bit each time you get paid, even if you can't save much. A high minimum opening deposit can discourage a beginning saver.

FDIC insurance

Make sure your child's money is safe by verifying that the institution you choose is covered by the Federal Deposit Insurance Corporation (FDIC), which typically insures bank deposits up to $250,000 per depositor, per institution. If you're banking with a credit union, the funds should be insured by the National Credit Union Administration (NCUA), which is the credit union equivalent of the FDIC.

Educational features

If your goal is to teach your child about the importance of saving money and concepts like compound interest, look for a bank account that includes educational resources. However, if you're willing to take the time to teach your kids about personal finances, these resources may be less important.

Convenience

If you want to teach your child about banking in person, look for a bank with physical branches near you. But if in-person access is less important, look for an institution with a highly rated banking app. When your child is young, a no-frills savings account may suffice. But as they get older, you'll want a savings account you can connect to a checking account for teens.

How can I open a savings account for kids?

Some banks let you open a bank account for kids online, while others will require you to go in person. Regardless, you'll need to provide the following:

• Name, date of birth, and Social Security number for both you and your child
• Government-issued photo ID for you, such as a driver's license or passport
• Contact information, such as your address, phone number, and email address
• Opening deposit, if it's required

Is it safe to open a savings account for kids?

As long as you choose an institution that's federally insured by the FDIC or NCUA, your child's deposits will be safe. If you're worried your child will mismanage their money, look at the account's parental monitoring tools, as well as the institution's policies. Some banks require parental approval for any account withdrawals made by the child.

Our savings account methodology

At The Motley Fool Ascent, we rate savings accounts on a five-star scale (1 = poor, 5 = best). We evaluate all savings accounts across four main criteria: annual percentage yield (APY), brand and reputation, fees and minimum requirements, and perks that really make a difference -- think ATM access, linked checking accounts, or even branch access.

Our scores are weighted as:

• APY: 50%
• Brand and reputation: 20%
• Fees and minimums: 15%
• Other perks: 15%

Our aim is to maintain a balanced list featuring top-scoring products from reputable brands offering competitive APYs and standout features. Learn more about how The Motley Fool Ascent rates bank accounts.

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