Are you a parent wondering what are the best children’s savings accounts that can put your youngster on the right financial path? Selecting a strong savings account can lay the foundation for financial literacy—a skill that helps them lead a more prosperous life. In this guide, we’ll look at the importance of opening a savings account for your young financier and what to look for in choosing one.
What Is a Children’s Savings Account?
Let’s start by defining a children’s savings account. It’s more than just a standard bank account—it’s specifically designed for young savers.
Savings accounts geared toward children aim to foster and nurture savings habits from an early age. They stand apart from regular savings accounts with unique features and incentives, such as minimal fees and more accessible balance requirements, making them ideal for a young demographic.
Benefits of Starting Early
Teaching kids financial concepts early in life can make a big difference in how they handle money. Think of it like planting a seed for good money habits that’ll grow as they do.
When you start young, skills like mastering money management, developing saving habits, and understanding financial planning are easier. Financial experts suggest opening a savings account for your child around nine, as this is when they typically begin to understand money concepts more clearly.
A children’s savings account can be the perfect training wheels for their financial journey. It serves as a practical tool for teaching the value of money, the importance of saving, and how interest works to grow their savings over time. Whether they’re saving an allowance, birthday money, or cash from odd jobs, every penny saved is a lesson learned in financial responsibility and independence.
Best Savings Accounts for Children
With so many options for children’s savings accounts, knowing what to pick is difficult. Here are a few top choices:
1. Capital One Kids Savings Account
Opening a Capital One Kids Savings Account allows you to link your bank accounts to your child’s account. You and your child can also easily manage the account online from a top-rated app.
Here are some other key benefits of this account:
- Kids Savings Accounts have zero fees and don’t require a minimum balance
- Parents can schedule allowance transfers and deposits regularly
- Earn relatively high interest (2.50% APY)
2. PNC’s ‘S’ Is for Savings Account
When you open an ‘S’ is for Savings account at a PNC bank, you’ll enjoy easy-to-access online banking, where just $1.00 starts earning interest.
Here are additional reasons to open this account for your child:
- No minimum opening deposit
- A low $5 monthly fee that can be waived under certain conditions
- Access to an interactive learning center where children can engage with beloved Sesame Street characters
3. Regions Bank
Regions Bank ranks as one of the best national banks, particularly in the Southeastern United States. Its Regions Savings for Minors is ideal for educating children on financial management and responsibility.
Here are its most attractive features:
- No monthly fees
- Uniform interest rate for any balance
- Only $5 is needed to open
- Option for automatic transfers
4. Spectrum Credit Union’s MySavings Youth Account
This bank has a long history of excellent customer service, and its MySavings Youth account offers an APY that’s hard to beat.
Check out these account benefits:
- No monthly fees or minimum balance rules
- Enjoy a 6.77% variable rate (7.00% APY) on balances up to $1,000
- ATM cards are available upon request for account holders ages 13 and older
5. Credit Union of Texas Kids Savings Account
This bank hails from the Lone Star State, and its Kids Savings Account offers many appealing features to set your young one off on the right financial path.
Here are a few standout features from this bank:
- Easy online banking tools
- Remote deposit functionality for convenience
- Online features to increase your child’s financial literacy
Key Features to Look for in a Savings Account for Children
Opening a savings account is an excellent idea when teaching kids about financial responsibility. But what are the best children’s savings accounts out there? When searching for the perfect option for your child, focus on factors like interest rates, fees, accessibility, and educational tools.
Interest Rates: Maximizing Savings Growth
The interest rate is one of the most enticing features of a savings account for children. A higher rate means more earnings on the money saved, which can be a great lesson in compound interest for kids.
Some accounts offer higher rates than standard adult accounts as an incentive to save. It’s important to compare these rates but remember that they fluctuate over time.
Fees: Keeping Costs Low
Fees can quickly eat into savings, so looking for accounts with low or no ongoing costs is crucial. Many children’s savings accounts are designed to be cost-effective, with no monthly maintenance fees or minimum balance requirements. However, checking for hidden fees, like withdrawal charges or account inactivity, is always wise.
Accessibility: Easy Deposits and Withdrawals
Accessibility is key, especially when children are learning to manage their money. Look for accounts that offer convenient online access, mobile apps, and branch locations if you want your child to do some in-person banking. Some accounts also provide features like automatic transfers from a parent’s account or the ability to deposit checks remotely, making it easier for kids to save their allowance or birthday money.
Educational Tools: Learning Financial Skills
When you’re trying to determine what the best children’s savings accounts are, consider the educational component. Many institutions now offer interactive tools and resources to teach kids about saving, budgeting, and other financial concepts.
These aren’t your typical, boring banking tools—they include online games, savings calculators, and even budgeting apps designed for young users. These tools not only make saving fun but also impart valuable financial lessons. Remember, the best account for your child will hinge on their individual needs and preferences, so take the time to explore all the options.
FAQ About Children’s Savings Accounts
As you compare options, you may have questions. Read on to find answers to common queries from parents searching for the best children’s savings accounts.
Should I Open a Savings Account or CD for My Child?
A certificate of deposit (CD) often qualifies for a higher interest rate than a traditional savings account, making it an appealing option. However, you will have to open the CD as a custodial account, as people under the age of 18 don’t qualify. This type of account also has restrictions on withdrawals, starting balances, and other factors.
How Much Money Can I Put in My Child’s Bank Account?
Most banks don’t have restrictions on how much money can be in a savings account. However, limits apply to what the Federal Deposit Insurance Corporation (FDIC) will insure.
Power Finance Texas Is Committed to Helping Improve Your Finances
Teaching your kids about financial literacy is a gift that keeps giving. Start by figuring out what the best children’s savings account is to provide them with a strong foundation in managing finances.
Meanwhile, for your own financial needs, Power Finance Texas is here to assist. Whether you need cash for a medical emergency, car repairs, or home maintenance, we can help you secure a personal loan quickly, often within a day of approval. Applying online is straightforward; you only need a Texas-issued ID, proof of income, a checking account, and a home address.