The best savings accounts for kids and teens

If you’re teaching your kids about the value of a dollar, you can take the old-fashioned route of putting coins and money in a piggy bank on the shelf. But nowadays, banks offer a better alternative that both parents and children can benefit from.

Savings accounts for children and teenagers allow them to park their savings in a safe place and enjoy several benefits. While this old-school approach can be fun, the right savings account can offer lessons in personal finance and may even come with interest to help your child earn more toward their savings goals.

Here’s an overview of the best savings accounts for kids and teens and how to choose the right one now.

What is a Children’s Savings Account?

The Children’s Savings Account is designed with young savers in mind. Here’s how it works: In most cases, a parent or guardian opens and co-owns the bank account for their child, although there are some exceptions for teenage accounts. Children can then transfer, deposit and withdraw money. The best kids savings accounts have minimal fees, no minimum balance requirement and a mobile app for parents and kids for convenient account management. Depending on the account, parents can usually set controls for their children to prevent them from overspending.

Some banks require parents to link their external bank account for transfers. Children’s savings accounts are usually for people under 18, but some banks have a requirement that children be at least 12 years old.

The best savings accounts for kids and teens

• 3.10% APY with $100 minimum balance
• Tax free
• Comes with an ATM card
• You must be a member to open an account
• For ages up to 12 years

The Alliant Credit Union Children’s Savings Account pays a very competitive 3.10% APY after the account reaches an average daily balance of $100. It comes with several benefits for parents, including tracking your child’s account online and mobile check deposits through the app. The account also comes with an ATM card to help kids learn how to make ATM deposits and withdrawals.

It is only intended for children 12 years of age and younger. When your child turns 13, they’ll be eligible for the Alliant Teen checking account that comes with a savings account.

However, you will need to be a member of Alliant Credit Union to open an account. The easiest way to qualify is to become a member of Foster Care 2 Success; Alliant will cover the one-time membership fee of $5.

Read ours Alliant Credit Union Banking Review.

Best for teenagers

Indiana’s first internet bank

• 0.80% APY
• No fees or minimum balance requirements
• Requires a minimum deposit of $100
• For ages up to 18 years

First Internet Bank’s Tomorrow’s Tycoons account checks all the important boxes of a kids’ savings account: no fees and the ability to earn interest. Although the account does not come with an ATM card and requires a minimum deposit of $100, the account also pays 0.80% APY. It converts to a free savings account when your child turns 18. Until then, a parent or legal guardian must be the joint account holder. And keep in mind that First Internet Bank is an online-only bank, so you’ll need to be comfortable managing the account online with your kids.

• 0.30% APY
• Tax free
• There is no minimum balance requirement
• For ages up to 18 years

Capital One’s 360 Performance Savings Account is now on our list of best savings accounts for seniorsand his children’s savings account can be a great starting point for your children.

There are no fees or minimum balance requirements, and you can even show your child how personal banking works at one of Capital One’s branches, ATMs or coffee shops. Although the APY is only 0.30%, that’s still a lot better than other big banks.. A few things we like about this account: You can link your external bank account to your child’s savings account, for plan to send his allowance and still make regular deposits. We also like that parents can create multiple accounts for different purposes and still use the Capital One app to manage their savings.

Read ours Capital One Bank Review.

Best for earning interest

Bethpage Federal Credit Union

• 5.00% APY on balances up to $1,000
• $5 minimum deposit
• No monthly fees
• For ages over 20

The Bethpage Federal Credit Union Student Savings Account is available for children up to age 20, so this account can serve your child for a long time. However, digital banking is only available to children over the age of 13.

You’ll need a minimum $5 deposit to get started, and there’s a $1,000 limit on ATM withdrawals, which might be worth keeping in mind if your child is saving towards a big goal. Its 5.00% APY is certainly an attractive offer, but you’ll only earn this on balances up to $1,000. However, account holders still earn interest on larger balances – between 1.39% and 5.00% on balances between $1,000 and $10,000. Although Bethpage’s physical locations are limited to New York, you can also open manage an account digitally anywhere in the US – just keep in mind the 13+ age limit for digital banking.

• No minimum deposit
• No monthly fees for account holders under 18
• Offers interactive learning with Sesame Street characters
• For ages up to 18 years

PNC’s S is for Savings Account sneaks onto our list because of a design that helps make learning about budgeting fun. Let’s face it: Your kid might not be all that interested in hearing your take on saving, but he’ll be more inclined to listen to Elmo, the Cookie Monster, and other familiar Sesame Street characters talk about money. You can also teach them money management at one of PNC’s 2,600 in-person branches or manage the account entirely online.

There is no minimum deposit and no monthly fee for under 18s. There’s one downside, though: The interest rate is a paltry 0.01% on balances of at least $1.00. But this is not too surprising, since best savings rates not usually found in the big banks.

Although you can technically keep this account after your child turns 19, although you may have to pay a $5 monthly service fee if you don’t meet other minimum balance requirements. But the fee is waived for children 18 and under.

Read ours PNC Bank Overview.

Pros and Cons of Savings Accounts for Kids and Teens

Should you open an account for your child or just hide some of their money in your own account? Since your child will be in the early stages of managing their money, this decision will involve some extra work on your part and how you want to teach your child about money. You may want to give your child more independence with their own savings account, but you also may not want to manage another account.

Here are a few pros and cons to consider before opening a new account.

How to choose a savings account for your child or teenager

When choosing the best savings accounts for your child or teenager, here’s a rundown of some of the key tips to follow:

Look local: There are quite a few credit unions that offer additional benefits with their savings accounts, such as bonuses for good grades, such as Sky Federal Credit Union. They tend to be smaller, local financial institutions – so they don’t appear on our list. But if there is one in your city, it can be a great payoff: better academic performance and better personal financial habits.

Start with where you already bank: Many institutions require that the parent or guardian of the child’s savings account owner also have an account at the same bank or credit union. If you don’t want to open another account elsewhere, start where you already bank. Because senior accounts often come with fees and minimum balance requirements, be sure to consider your own financial situation, including your savings APY, minimum balance requirements and fees.

Ask about educational tools: A children’s savings account should offer more than a place to park their money. Evaluate the bank’s mobile app to see if it’s an easy way to talk to your child about money—some offer financial literacy courses and games, like PNC. If your child just sees the savings balance, they aren’t really learning much. Instead, money management guides and tutorials can help them make smart budgeting decisions.

How to open a savings account for your child

Requirements for opening a savings account for your child vary from bank to bank. In general, you will need to perform the following steps:

Find the bank and account that work for you: While some online-only banks may offer higher savings rates, credit unions also have several unique advantages. Consider what banking services and products you will need along with your child’s savings account, as some institutions may require that the co-owner of the account also have an account there.

Collect your information: Whether or not you need your own account, you’ll need to include your personal information — including you and your child’s Social Security number — as a co-owner. The bank will also need your child’s social security number or a current passport, but if your child is older, you may also want to include a school ID or driver’s license. In addition, the bank will need other personal information, such as your physical address, phone number and email.

Complete your application for your child: Many banks and credit unions will allow you to apply for a child savings account online. However, there are exceptions. Some require you and your child to visit a branch or schedule a virtual appointment to open the account.

Make an initial deposit: Although many children’s savings accounts do not require a minimum deposit, it is still wise to fund the account. Be sure to ask your bank about deposit requirements such as cash, check, or direct deposit. Also consider setting up an automatic monthly transfer. For example, if your child is old enough to understand the concept of an allowance, you can also transfer money after the chore is done to show them the value of work in exchange for money.