Teaching your child how to manage money from an early age is crucial to getting them on a good financial path. One way to do that? By opening a savings account specifically for them. The best savings accounts for kids offer high annual percentage yields (APYs) to teach kids about interest, as well as plenty of account alerts and parental controls. Using a strict methodology, we’ve come up with the top five savings accounts that can introduce your child to money management.
The 5 best savings accounts for kids
Any of the accounts we’ve curated below can be used to teach your child about saving money and start them on a path to success. They all offer above-average APYs, no monthly fees, and plenty of perks specifically for younger savers.
Spectrum Credit Union MySavings Youth Account: Best for older kids & teens
Spectrum Credit Union was founded in 1973 and merged with Chevron Financial Credit Union in 2012. This means you can open up the MySavings Youth Account at whatever credit union is more convenient for you. The account offers a 7% APY on balances up to $1,000, and you can qualify to open this account until you turn 22. There’s one main caveat: The youth has to opt out of paper statements and enroll in e-statements within 60 days of account opening or the account converts to a regular Spectrum Credit Union Savings account.
Why we picked it
The Spectrum Credit Union MySavings Youth Account is one of the few accounts available for older teens. You can keep it until you turn 22, so you won’t have to worry about moving your money around while you’re occupied with college. Also, when kids turn 13, they can request an ATM card to access their funds. Not all savings accounts for kids offer this, and it can be a good tool for learning to spend responsibly.
The APY is also extremely high compared to the national average, and the fact that interest compounds daily means your child will learn how to have their money work for them.
Apple Bank SmartStart Savings Account: Best for making payments
Serving customers in New York and New Jersey, Apple Bank offers the SmartStart Savings account to kids ages 6 to 25. While you can access and manage this account online eventually, you’ll need to make an appointment at a local Apple Bank branch to open it. You can open one SmartStart Savings account per child, and teens ages 13 to 17 can request an Apple Bank Visa Debit Card if they have a joint account with their parent or guardian.
Why we picked it
The Apple Bank SmartStart Savings is excellent for kids who want to start spending responsibly. Once kids turn 13, they can get a debit card that offers unlimited free ATM transactions worldwide. This lets kids plan their own spending—whether they’re on an international family vacation or buying some after-school snacks.
But beyond the debit card, Apple Bank also lets kids link up digital wallets and send and receive payments via Zelle. There’s even an option for mobile check deposit. Young adults who have their first job or first apartment need to pay bills or receive direct deposit, and this account is ideal for that—especially since the balance limit for earning the highest APY is higher than the other banks on this list.
Spectra Credit Union Brilliant Kids Savings: Best for earning interest
Back in 1946, the Naval Research Lab Federal Credit Union was founded. It wasn’t until 2021 that the institution rebranded as Spectra Credit Union. Then, in 2023, Spectra announced the launch of its Brilliant Kids Savings account. This account offers a 10.38% APY on the first $1,000 saved, as well as interactive activities to help kids learn about money. To open this account, kids need to have a parent, grandparent, or guardian who’s also a member of the credit union.
Why we picked it
Earning over 10% APY is unheard of, and it helps the Spectra Credit Union Brilliant Kids Savings stand out among competitors. If a kid can deposit the full $1,000, they’d earn over $100 a year in interest. This bonus teaches kids a huge lesson about the power of interest rates.
We also like how many educational tools Spectra provides for kids. It has an entire interactive program called Banzai Junior that offers real-life scenarios to help children learn to make wise financial decisions. It even offers an activity book that kids can fill out to teach them about money in a way that’s more fun.
Capital One Kids Savings Account: Best for savings goals
Capital One may be best known for its credit cards, but it also maintains robust personal banking accounts, including the Capital One Kids Savings Account. This account is open to children under 18 and requires a parent, guardian, or other adult to be a joint owner. Adults have full access to the account with their own username and password and can transfer money, set up automatic savings, or manage account details.
Why we picked it
The Capital One Kids Savings Account is one of the few where you can open multiple accounts for different savings goals. For example, a kid can have one account for saving up for a new video game, one for college, and one for a new car fund—there are no limits. Another helpful feature is the automatic savings tool that lets parents send allowance on a set schedule. Kids will get in the habit of receiving money on a set basis and can learn to track progress toward their goals.
The level of parental control on this account is also good for children who are not quite ready to manage their own money yet. Parents are the only ones who can move money out of the account, which can prevent kids from spending their savings accidentally on the latest toys they’ve been eyeing.
Alliant Credit Union Kids Savings Account: Best for younger kids
Alliant Credit Union has an 85-year history as a not-for-profit financial cooperative with over 800,000 members. Its Alliant Kids Savings Account is intended for kids 12 and younger and requires joint ownership with a parent, grandparent, or guardian. While there is a required $5 initial deposit, Alliant pays this on your child’s behalf, eliminating any minimum opening deposits.
Why we picked it
Because it’s specifically for younger kids, the Alliant Kids Savings Account is excellent as a starter account for little ones once they start earning an allowance or have too much Christmas money to spend at one time. Parents can easily oversee their child’s allowance with digital transfers.
Another reason this account stands out is that it provides kids with more autonomy. They have to give permission for an adult to see their account. This, along with the included Alliant Savings ATM Card, can help them feel more independent and confident in their financial skills. Since the only major fee to worry about is a paper statement fee, kids can’t get into too much trouble with hidden charges.
What to look for in a savings account for kids
To Jed Collins, Certified Financial Planner (CFP) and founder of Money Vehicle, a company that provides financial literacy courses to schools across the country, a savings account for kids is like a vehicle: “If you use it the correct way, it’ll take you to the destination you want to go,” said Collins.
When you’re ready to open a savings account for kids, Collins recommends you consider two big questions: Who do you want to connect with as a teammate, and what is the purpose of the account? According to Collins, this stage is a great time to explain the difference between a bank and a credit union. With this knowledge, you can think about what institutions might be the right fit for your little one’s needs.
Kids also need to think about the intention of their account. Will they be using it to save up for a specific item, or are they just opening an account because their parents told them to?
Once you’ve answered these questions, you can start narrowing down accounts based on the following features:
- No monthly fees: “A youth savings account should be free,” said Teri Williams, president and chief operating officer (COO) at OneUnited Bank. Children might not have the income to pay monthly fees, so skip accounts that charge to store your money in them.
- High interest rate: “These accounts are much more about the principles than the product,” said Collins. Even so, helping your child earn a little extra cash with a higher interest rate isn’t a bad thing.
- Parental controls: Parents should be able to manage transfers and limit spending, especially on accounts for younger kids. Look for accounts with robust parental controls if you think you’ll need them.
- Account alerts: “With the tools and technology today, you can get notifications when money is in, money is coming out, or this account has fallen below a certain amount of money,” said Collins. “For students to see this activity is a really good callout. Having that connection and conversation going with those alerts is good to learn.”
- Financial literacy education: Williams recommends accounts that offer additional educational tools to help children better understand the account.
How to open a savings account for your child
Opening a savings account for your child will likely require you to gather documentation for both you and them. Every bank and credit union is different, but here are some general steps to expect:
- Provide personal information for the adult and the child: Institutions will want to verify both your identities, so they’ll likely ask for your names, addresses, contact information, and Social Security numbers. “Protect, protect, protect your child’s confidential information, particularly their Social Security number,” said Williams. “Even kids’ savings accounts can be subject to fraud.”
- Offer additional proof of identity for yourself: Because you’ll be the joint account owner, you may need to give the institution your driver’s license number and employment information. If the bank only lets parents or guardians be joint owners, they may also ask for proof of your relationship with the child.
- Prepare your opening deposit: If your child has some holiday checks to cash, that might work. But if they don’t have any other accounts to transfer from, you may need to supply their first deposit for them.
Pros and cons of savings accounts for kids and teens
Pros
- Earning interest: While a child won’t get rich off of their interest earnings, having a savings account can teach them the value of a high APY. “The big idea here is employing your money,” said Collins. “Money is lazy—if you don’t tell it what to do, it’s just going to sit there.”
- Learning accountability: With a savings account, a kid will be responsible for maintaining their balance and keeping their ATM card safe. This prepares them for later in life when they’ll have even more responsibilities.
- Learning money management: “Having a savings account as your teammate is the first step of a financial plan,” said Collins. “Every millionaire began with a checking and a savings account.”
- Saving for goals: If a kid really wants to buy an expensive video game, having a savings account gives them a better way of storing their money rather than shoving it under the mattress.
Cons
- Taxes: Depending on how much a child is earning in interest, they may face increases in their taxes.
- Fees: Most children’s savings accounts don’t have many fees, but it’s always important to read the fine print to make sure you’re not missing anything.
- Security issues: Opening a kids’ savings account can put children’s confidential information in danger by increasing their risk of fraud or identity threat.
- Potential for abuse: Williams warns that some parents may not always be looking out for their children’s financial well-being. “Regrettably, some parents with ChexSystems records use their children’s personal information to open bank accounts,” said Williams.
Should you choose a kids’ savings account or a custodial account?
A custodial account is slightly different from a traditional savings account as the parent is completely in control of the funds until the child turns 18.
“A custodial account is the only way a child under 18 years old should have a bank account because you must be 18 or over to sign a contract and a bank’s disclosure is an agreement/contract,” said Williams.
That said, once your child is mature enough to make their own money decisions, then they can graduate to a savings account.
“If your child is earning their own income, it’s time to take the keys to their own income and get started on their own with a savings account,” suggested Collins.
Our methodology
To narrow down our top picks for the best savings accounts for kids and teens, the Fortune Recommends team evaluated more than 10 savings accounts specifically for kids from a variety of traditional brick-and-mortar banks, online banks, and credit unions.
We ranked each kids savings account in these core categories:
- APY (20%): Kids should be learning the value of interest and how their money can work for them.
- Minimum to earn APY (5%): There shouldn’t be any high minimums on a child’s savings account.
- Minimum opening deposit (20%): Accounts with no minimum deposit requirement scored better.
- Mobile app rating (15%): Accessing your money should be simple and straightforward; banks with highly-rated mobile apps did better.
- Customer support (15%): If you or your child have a problem, it should be easy to get a hold of a real human. We rated phone support the highest, but also took into account email and chat support.
- Monthly fees (10%): A child’s savings account shouldn’t come with any monthly fees.
- Security features (10%): Keeping your child’s money and information safe should be top-of-mind when considering which institution to bank with.
- Physical ATM card (5%): Having more ways to access their money can be a great learning tool for children and teens.
