Getting a bank account for your child can go a long way to teach them about money management. It is a great idea to find a bank account that has accounts designed just for kids. Look for one that can help teach your kids about handling and saving money through interactive online tools.
Capital One Kids Savings Account
Listed among NerdWallet's "best savings accounts for kids," Capital One offers a one percent annual percentage yield (APY). There is no minimum amount required to open the account and it doesn't have any monthly or maintenance fees. In addition to setting up savings goals, kids can create automatic savings plans. It also offers limited financial education for kids. This plan is best for kids that get a consistent allowance or who receive funds online or through the mail. Parents can also set up their own user ID and personal identification number (PIN) to be able to access to the account.
PNC 'S' is for Savings
In 2018, ValuePenguin acknowledged PNC's 'S' is for Savings account, selecting it as the best option for younger kids. The account's online experience provides educational tips through Sesame Street characters and offers goal setting for children. The account also gives those littles unlimited deposits and allows for automatic saving. In order to open this account, kids need $25, but there is no monthly charge. Opening an account can be done online or at more than one of 2,600 PNC locations. While this account offers lots of online fun features, the APY is only .01%. Therefore, while this isn't a great account for bulking up a child's savings, it does help teach kids money management skills.
Alliant Kids Savings Account
Listed among best accounts for younger children on Smartasset, Alliant Credit Union offers a kids' savings account with a 1.70% APY. They offer online banking and also have 11 physical branches. In addition to offering mobile banking and helping youngsters develop good savings habits, Alliant only requires a $5 initial deposit. Parents need not worry because this account offers joint ownership and has no monthly fees. Your kids also have multiple online tools available to them learn money management. However, unlike some other Alliant accounts, it doesn't offer a bonus. In order for your kid to sign up for this account, you must meet the credit union's eligibility requirements, such as living in a select location or being a member of a specific organization.
Bank of America Minor Savings Account
With more than 4,500 branches, Bank of America (BOA) is NerdWallet's top choice for a bricks and mortar bank with a great savings account for children. Kids start their own minor savings account at BOA with just $25. While the account's .03% APY is a bit low, you don't need to maintain a minimum balance. In addition to face-to-face banking, kids have access to mobile banking and a debit card. They can also make automatic transfers if they have a checking account with the bank.
Benefits of Savings Accounts for Kids
- Having a savings account can teach children to use money wisely, saving for both short-term and long-term goals.
- Kids' savings accounts can teach financial responsibility early in life.
- Children who learn at an early age to save money are more likely to carry that pattern into their adult life.
- A savings account can teach children about interest payments and making their money work for them.
- As children get older, they can use their savings accounts to learn how to do basic banking tasks such as making deposits or withdrawals and adding or subtracting to know their account balance after a deposit or withdrawal.
Selecting an Account for Your Children
When you are selecting the best savings account for your children, be sure to understand the details of how the account work.
- Does the bank charge low-balance fees or monthly fees for the savings account?
- What interest rates does the account offer?
- Does the account offer any additional services such as a birthday or Christmas club or financial responsibility classes?
- How accessible is the bank? Is it nearby, and is it easy to get to the bank to make deposits or withdrawals?
- Are there any value-added benefits of special interest to a child, such as age-appropriate financial education features?
Finding the Right Child-Friendly Savings Account
Ultimately, selecting the best savings account for your children is based on a number of individual factors like interest rates, fees and convenience. Regardless of your choice, getting your children to start saving early could set them on the path to future financial freedom and stability.