Intro: Savings Account for Kids

We all want our children, grand-children and young relatives to grow up understanding fiscal responsibility. Moreover, wouldn’t it be great to have a little money stocked away in the bank to give them the best start for their adult life?

Whether you plan to help them pay for their first car, their tuition at college or for the down payment on their mortgage, opening a kids savings account might be just the way to accomplish all of those things at once.

Savings for kids doesn’t have to be complicated or out of your reach. We’re here to help you find out how to find the best savings account for kids, investigate the value of savings bonds for kids, and learn about saving for kids in general.

So let’s dive right in.

Why Open a Savings Account for Kids?

It’s never too early to begin implementing good financial skills into the plethora of things that you’ll teach your child as he/she grows up.

Skills like savings can be lost in the shuffle, but by slowly siphoning birthday money, Christmas gifts or allowance money into a kids savings account for the future, you’re demonstrating for your child that setting aside funds is important.

A savings account for kids can drastically improve their chances of success for the future. According to the Consumer Financial Protection Bureau, one recent study showed that children who had a kids savings account were three times more likely to attend college and four times more likely to graduate.

The savings didn’t even have to be substantial. Even an account that held less than $500 had the same result.

how to find the best savings account for kids

Best Kids Savings Account

You can begin to teach your child how to use basic banking functions, like making deposits, balancing his/her account, or making withdrawals at an ATM. It’s never too early to begin teaching the benefits of saving overspending.

Even claims that opening a savings account for kids is one of the best ways to begin teaching them to manage their money wisely.

See Also: How to Pay off Student Loans – What Is the Best Way?

Tips for Kids Savings Account Contributions

Having a hard time getting your child to fork over his/her hard-earned (or not-so-hard-earned) dollars to deposit them into savings? The Simple Dollar has compiled a handy list of tips to make saving for kids an easier subject to broach.

  • Let your child do the math. When they’re old enough to perform basic addition and subtraction, start letting your child do the math on how much money is in his/her account with every new deposit. They will begin to grasp the concept that a savings account for kids can really allow their dollars to stack up.
  • Show them how interest builds. If you have the ability to monitor your kid’s saving account online, take the time to show him/her how the interest adds up. Teach them that by allowing the bank to hold their funds for a while, their money works that much harder for them.
  • Bank visits can be a fun time. Most banks have bowls of lollipops and stickers to hand out to their smaller customers. If you teach your child that going to the bank can be a fun experience, he/she will look forward to visits there and may even become more willing to make voluntary contributions.

Are you ready to teach your children the value of regular contributions to their kids’ savings accounts? We’ll take a look at how to find the best savings account for kids so that their money can work harder and go further for their future.

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How to Find the Best Savings Account for Kids

We want to do the very best for our children. When it comes to savings, that means we want to know how to find the best savings account for kids. In your search for an account that will perfectly meet your family’s expectations, there are a few rules of thumb you should bear in mind.

  • Fees: With so many options available, the best kids’ savings account will have no minimum balance requirement or monthly fees. You don’t want to take money out of your kid’s savings to pay for the bank’s maintenance on the account.
  • Interest rates: Not every savings account for kids will offer stellar interest rates. National banks will typically offer lower interest rates than credit unions or online banks. Online banks typically offer the highest interest rates, making for some of the best kids savings account options.
  • Access: Can you walk straight into your bank, or do you have online-only access? Consider opening a kids savings account that allows you access to both. This teaches your child how to make physical transactions that are commonplace in the financial world, and it also allows your child the flexibility to monitor his/her accounts from home.
  • Withdrawals: If you’re searching for how to find the best savings account for kids, you may want to look for an account that features an ATM card for easy withdrawals. Having his/her own card can teach your child that there is real money involved behind the plastic that he/she sees us use at the cash register so often.

Related: Top Financial Goals to Set – Short & Long-Term

How to Open a Savings Account for Kids

Now that you know exactly how to find the best savings account for kids, we’ll take a look at what you’ll need to open your child’s first account. Some states may not allow minors to open their own accounts. As the parent, you can open the account on your child’s behalf and may be able to have joint accounts with your little ones.

If you’re opening an account at a physical location, you’ll need to round up a few important documents before you’ll be able to open the best kids savings account.

kids savings accounts

How to Find the Best Savings Account for Kids

First and foremost, you’ll need to make sure you have all of your child’s personal information, as well as your own information, including your address, email address, and dates of birth. In terms of the tangible items you’ll need to provide, you should be prepared to show or share Social Security numbers, picture IDs – such as a driver’s license or other government-issued ID – and your initial deposit.

Best Kids Savings Account

With so many kids savings accounts that would match the description for a great program, we wanted to help you narrow down some of the options so you will have a firm footing before you apply.

There are a number of different programs available to make saving for your child’s future as well as teaching them the value of saving easy and worthwhile.

This list from NerdWallet includes its top choices for kids saving accounts:

  • Barclays Dream Account for Minors: This option gives a great interest rate (1.05% APY) and an even larger bonus for leaving the account untouched for longer periods of time. You won’t face any monthly fees, and your child won’t have access to making withdrawals (only parents can do that). This would likely be an online-only bank for you with only one physical location in existence.
  • Capital One 360 Kids Savings Account: Another online bank, Capital One 360, offers a relatively high-interest rate as well (0.75% APY), with no fees or deposits. With a very user-friendly interface, you can track goals and make savings plans with your kids.
  • Wells Fargo Kids Savings Account: If you want to give your kids the experience of walking into a bank to perform their regular activities, Wells Fargo offers a great program that will allow you to do just that. There are no monthly maintenance fees or minimums, but the drawback to the brick-and-mortar bank is the significantly lower interest rate (0.01% APY).

Certainly, there are other savings accounts for kids that will offer equally wonderful programs, but this roundup of the best kids savings accounts will get you started on your way to considering what would work best for your family.

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Savings Bonds for Kids

A popular way to begin saving for college expenses used to include gifting savings bonds for kids to prevent them from spending the money right away. The interest earned on a savings bond, whether a series EE or a series I, is minimal. Let’s take a look at how the two types of savings bonds for kids work:

  • Series EE Bond: These bonds will yield a set interest rate, accrued monthly for up to thirty years. After twenty years, they are guaranteed to at least double in value, no matter what the face value of the bond was. You do pay the total face value of the bond upfront.
  • Series I Bond: These savings bonds for kids are also purchased at face value, and they can be sold after one year for the amount originally paid. Unfortunately, you will earn no interest until the bond is at least five years old, but it will accrue interest for up to thirty years. This type of bond has one interest rate that is fixed while the other is connected to inflation.

Some professionals question whether savings bonds for kids are really worthwhile investments. Another option would be contributing to an investment account, like a 529 plan, to allow the money you would have gifted through bonds to accrue more interest specifically for the purposes of a college education.

According to Forbes, savings bonds for kids are not a rewarding experience for them, meaning they may not continuously encourage good saving habits into adulthood in the same way that a savings account for kids might.

For those who plan to hold onto the bonds until they fully mature or are guaranteed to double, in the case of the Series EE bonds, savings bonds for kids may still be the answer. However, with a twenty-year time frame on this type of bond to mature, it would have to be gifted when the child is still very young to be used for a college education or a car.

Savings bonds are a relatively easy, low-risk investment with a competitive interest rate given the level of risk involved. However, you may still be able to find more rewarding ways to create a desire for your children to save for future expenses.

Read More: How to Budget Your Money – Top Budgeting Tips


We all wish we had started saving our money much sooner, making savings for kids a priority for the next generation. By creating a savings account for your children now, you can teach them wise spending and saving habits that will make them more apt to finish college and have a bright financial future.

A kids savings account is a simple process to walk through with your children to help them invest the extra money they don’t need to spend right now.

While savings bonds for kids can still be a good investment, it is questionable whether they are the best possible investment you could make. Taking an in-depth look at how to find the best savings account for kids will give you the knowledge you need to move forward in creating a more financially secure future for your children.

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