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Best Savings Accounts for Kids 2019

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Don't limit yourself to accounts that specifically identify themselves as savings accounts for kids. Most of the best savings accounts for any type of customer have features that happen to be right for a child's account.

asian-girl-savingStarting a savings account is an important step in your child's financial education.

Besides giving you an opportunity to teach your child about how to manage a bank account and set savings goals, there is a lot to learn from the process of choosing an account.

For example, how would you teach your child to prioritize savings account features?

Certainly, interest rate should be high on the list. After all, if you would make your decision based on which savings account pays the highest interest rate, shouldn't that be the case for your child's savings account as well?

We thought so.

That's why our list of savings accounts for kids starts with banks that you would choose for yourself, because they consistently offer the best savings account rates over time.

When MoneyRates started looking into where to find the best savings accounts for kids, we found that the best savings accounts also make the best savings accounts for kids.

Rather than hype some of the less consequential features that some banks offer to attract parents ready to help their children take this step, we thought it best to point out the fundamentals. If it's good for your savings, it would be good for them too.

So here's our key tip: Don't limit yourself to accounts that specifically identify themselves as savings accounts for kids. Most of the best savings accounts for any type of customer have features that happen to be right for a child's account, such as, low minimums, competitive interest rates and online access.

Below are highlights of some of the best savings accounts for kids based on different account characteristics. Money market accounts are included in this overview because, functionally, their characteristics are very similar to savings accounts.

Editorial Reviews

While annual percentage yield (APY) is paramount for any saver, it isn't the only criteria to consider for your child's savings account.

To help you consider the possibilities, MoneyRates.com looked at four issues you might prioritize when choosing an account.

  • Best for High-Yield
  • Best Online Account
  • Best for Fees and Minimum to Open
  • Best Branch-based Account

Interestingly, our choice for best high yield was also our choice for best online account, best for fees, and best for minimum to open. So here are the top savings accounts and money market accounts for kids - and for you too.

Best High-Yield Account for Kids

MySavings Direct MySavings Account

ACCOUNT MINIMUM $0 to open an account

RATES Top savings account rate in each of the past three America's Best Rates surveys.

FEES None

ACCESS Online

FDIC-INSURED Yes


Best Online Account for Kids

MySavings Direct MySavings Account

ACCOUNT MINIMUM $0 to open an account

RATES Top savings account rate in each of the past three America's Best Rates surveys.

This is a repeat of the above listing for one simple reason: Online accounts generally have higher rates than traditional, branch-based accounts. That means the best online account is likely to also be the best high-yield account.

FEES None

ACCESS Online

Online accounts have another important advantage when it comes to supervising a child's account. As long as you and your child share the user ID and password with each other, you can access the account at any time to keep tabs on how it is doing.

FDIC-INSURED Yes


Best for Fees and Minimum to Open for Kids - Money Market Account

Sallie Mae Bank Money Market Account

ACCOUNT MINIMUM $0 to open an account

RATES Top money market account rate in each of the past four America's Best Rates surveys.

FEES None

ACCESS Online

FDIC-INSURED Yes


Best Branch-based Savings Account for Kids

Arvest Bank Cool Blue Savings

ACCOUNT MINIMUM $50 to open an account for children under 18

RATES Top savings account rate of any branch-based account in each of the past two America's Best Rates surveys.

FEES None for children under 18

ACCESS Branch-based, through a network of over 250 branches

FDIC-INSURED Yes


Best Branch-based Money Market Account for Kids

BBVA Compass Money Market Account

ACCOUNT MINIMUM $25 to open, $10,000 to qualify for top rate and waive monthly fee

RATES This is the rare branch-based account that has consistently ranked as well as some of the best online money market accounts for rates, though it requires a $10,000 balance to qualify for this competitive rate.

FEES $15 per month - but this fee is waived for accounts of $10,000 or greater so this account is really best suited for balances of that size.

ACCESS Branch-based through a network of over 600 locations and also available online. The top rate may not be available in all locations.

FDIC-INSURED Yes

A number of other strong choices of savings accounts for kids can be found in the table below.

How We Found the Best Savings Accounts for Kids

The savings accounts were identified by comparing rates and account types from the most recent America's Best Rates survey. This survey looks at a cross-section of U.S. banks that includes nearly three-quarters of all money in U.S. deposit accounts.

To take stock of all types of banking choices, this cross-section of banks includes both online and branch-based accounts, as well as large, medium-sized and small institutions.

What We Compared - Child-Friendly Savings Account Features

In identifying the best savings accounts for kids, we expanded the search beyond competitive interest rates. Here are the other child-friendly features MoneyRates.com considered:

Competitive interest rate

Savings account rates are subject to change at any time, so you and your child should compare rates when you are ready to start an account. Fortunately, over many years of researching savings account rates, MoneyRates has found that the accounts offering the highest yields tend to consistently stay among the most competitive accounts.

So, while MoneyRates.com based its analysis primarily on the most recent America's Best Rates survey, many of the leading accounts in that survey have also been among the leaders regularly in past surveys. Thus, there's a good chance that the leading account from that survey will be very competitive when you go to compare rates.

Low minimum-balance requirement

On the assumption that a child's savings account balance is likely to start small, MoneyRates.com looked for accounts with reasonably low minimum-balance requirements for starting and maintaining an account.

Fortunately, several accounts had little or no minimum-balance requirements, so it's not hard to find a savings account you can open with a modest amount of money.

Monthly maintenance fee

On a small balance in particular, a monthly maintenance fee can more than wipe out any interest the account earns. So, MoneyRates.com recommends looking for a savings account with no monthly service fee, or one where your child's balance would be large enough to qualify for a fee waiver. Fortunately, there are several such examples.

Type of access

MoneyRates.com recommends online banking for a child's savings account. This is because these typically offer the highest rates and allow a parent easy access to supervise the account.

Also, with online banking becoming increasingly popular, it makes sense to teach a child financial responsibility through experience with the type of account they are likely to have in the future.

FDIC insurance

Don't take this for granted. It is worth checking whenever you open a bank account, and it's easy to do. Always check for the FDIC symbol at your bank branch or on the bank's website. FDIC insurance guarantees that your deposits up to $250,000 are backed by the full faith and credit of the U.S. government in the event of a bank failure.

FDIC

Financial Companies We Surveyed

Again, the best savings accounts for kids don't have to be labeled as being specifically for children. As long as they have low minimum-balance requirements, no monthly fees and competitive rates they should meet the need of a kid's savings account. Here are some leading examples:

Bank Account High Yield? Minimum to Open Monthly Fees? Type of Account

MySavings Direct MySavings Account

Yes

$0

No fee

Online

Salem Five Direct

Yes

$100

No fee

Online

SFGI Direct Savings Account

Yes

$500

No fee

Online

Synchrony Bank High-Yield Savings

Yes

$0

No fee

Online

Marcus by Goldman Sachs Online Savings

Yes

$0

No fee

Online

FNBO Direct Online Savings Account

Yes

$1

No fee

Online

Ally Bank Online Savings Account

Yes

$0

No fee

Online

Barclays Online Savings Account

Yes

$0

No fee

Online

American Express High Yield Savings

Yes

$0

No fee

Online

Discover Online Savings

Yes

$0

No fee

Online

Sallie Mae High-Yield Savings

Yes

$0

No fee

Online

iGObanking

Yes

$0

No fee

Online

CIT Bank Savings Account

Yes

$100

No fee

Online

Radius Bank High-Yield Savings

Yes

$100

No fee

Online

Axos Bank High-Yield Savings

Yes

$250

No fee

Online

Sallie Mae Bank Money Market Account

Yes

$0

No fee

Online

Arvest Bank Cool Blue Savings

Yes

$50 for children under 18

No fee for children under 18

Branch-based

BBVA Compass Money Market Account

Yes, if balance is $10,000 or greater

$25, but balance must be at least $10,000 to get the best terms

$15 a month but waived with a balance of $10,000

Either online or branch-based

How to Get the Best Savings Account for Your Child

To get the best savings account for your child, start with the factors described previously that MoneyRates.com used in its analysis, including:

  • A competitive interest rate
  • A low minimum-balance requirement
  • No monthly maintenance fee
  • FDIC insurance

These additional factors may depend on your specific needs or preferences:

Type of access

Online banking can be a great way to supervise how your child's account is being used. However, if you prefer to do your banking at a branch using traditional paper statements and want your child to learn to bank the same way, you should focus your search on banks that have convenient locations in your area.

Savings and financial literacy tools

In addition to competitive account terms, you may also want to look for an account that offers special online tools to help a child work toward a specific savings goal or learn more about managing personal finances.

In addition, the very process of shopping for an account should be something you share with your child to show how much account terms can differ and why it is important to compare those terms before signing up for an account.

Special new-account incentives

Sometimes banks offer special incentives such as cash bonuses and gifts for starting an account. While these can seem attractive on the surface, the ongoing fee and interest rate terms mean more financially than these one-time incentives typically do.

However, if you identify two or more savings accounts that offer essentially the same terms, special incentives can be a useful tie-breaker when choosing between these accounts.

Benefits of Opening a Savings Account For Your Child

Besides the financial benefits of having a savings account for your child, it can help teach them valuable financial lessons and develop good banking habits. Here are some examples:

  • Comparison-shopping among savings accounts can demonstrate the importance of being an informed consumer when it comes to making financial decisions.
  • Putting money into an account can show the value of accumulating savings rather than leaving money available for immediate spending.
  • A savings account demonstrates how compound interest can work in your favor - essentially, how your money can make money.
  • Monitoring the account can help your child learn how to balance a bank statement, which is a vital personal finance skill.
  • Working toward a savings goal can teach your child the value of delaying spending and planning ahead.
  • All of the above can sharpen your child's math skills by showing that there are real-world applications for those skills.

Teaching Your Child to Use the Account

Setting up an account is just the start. Your child's first bank account represents an ongoing opportunity to teach good banking habits.

If your child is old enough to understand any of it when you first open the account, include them in the selection process described above. You want to demonstrate that all banks are not the same and that discriminating customers can do better than average.

So, once you've opened an account, review the following topics regularly with your child:

  1. Shopping for a bank account

    Show your child how to gather information on savings accounts, and have them participate in the process of comparing savings account rates and features. Ask them to explain their choices and why they would be effective.

  2. Filling out application paperwork

    Before long, your child may need to fill out applications for colleges and financial aid. Helping them fill out a bank application under your supervision can give them a head start. It can help them become familiar with the terms, the process, and how to make sure everything is accurate and complete.

  3. Record-keeping

    As convenient as online statements are, customers should always keep their own set of records for comparison with the bank's records. This ensures your balance is fully up to date and can help you spot new bank fees or errors.

    Let your child manage the record-keeping for their account. The math involved is pretty simple, so you should be able to show him or her how to keep and update these records at a fairly young age.

  4. Security

    If it's an online account, stress the importance of keeping passwords confidential. Teach them about making passwords hard to guess. Help them understand the dangers of accessing the account from an unsecured wireless connection and show them how to log off when finished.

  5. Goal-setting

    Talk to your child about what they hope to save and help them create a plan for how to meet their goals.

  6. Ongoing evaluation

    Children - and adults - need to understand that bank account terms are subject to change. Periodically check that all the conditions that were in place when you chose the account still apply - for example, that there are no new fees and that the interest rate is still competitive.

The day will come soon enough when your children will be grown-ups handling their own banking relationships. If you've passed on these skills, they'll have a foundation that can help them manage their finances so they can meet future situations.

FAQ

Finally, here are answers to some frequently asked questions about savings accounts:

No. While many banks do offer special accounts for kids, it is far from the norm.

However, as described earlier in this article, many of the same terms that make a savings account a good deal for adult customers also make an account a good fit for younger customers.

In-person withdrawals (or withdrawals by ATM) are not limited, but transfers to third parties such as checks or automated payments are limited to six per month.

If you expect your child to use the account to meet regular expenses, you might consider a checking account instead - or having both a checking and a savings account.

A checking account is designed for frequent transactions, so there is no limit on how many transfers you can make to third parties. However, checking accounts are more likely than savings accounts to charge fees and typically have lower interest rates.

You should be able to access money almost immediately, though this may depend on your bank's processing procedures.

Also, the amount you can access via an ATM at any one time might be limited.

If you want the security of an FDIC-insured account, a certificate of deposit (CD) can be a way to earn more interest, especially if you choose a long-term CD.

While savings accounts are designed to allow you to access your money at any time, a CD requires you to commit your money for a specified period of time. Typically, if you want to access money in a CD before that time is up, you have to pay an early withdrawal penalty - or you could explore a no-penalty CD instead.

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