The 5 best savings accounts for kids and teens

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Parents play a crucial role in shaping their children's money behaviors, as these habits are often established at an early age.

Luckily, there are financial tools available to help parents teach their kids about money management. Kid-focused savings accounts offer a chance for youngsters to learn about money and build financial habits.

With so many savings accounts on the market, choosing the right one can take time and effort. We’ve compiled a list of some of the top savings accounts for kids to help you make the right choice.

Best savings accounts for kids 

• Capital One Kids Savings Account
• Alliant Credit Union Kids Savings Account
• PNC Bank S is for Savings® Account
• PenAir Federal Credit Union Level Up Savings Account
• Bethpage Federal Credit Union Student Savings Account

Capital One Kids Savings Account

Capital One offers a high-yield savings account with no fees or minimum balance requirement, making it an excellent choice for kids who want to see their balance grow over time. It’s available to children under 18 and adults who co-sign onto it.

You can earn 2.50% on your money, and there’s no minimum deposit required to open or maintain the account.

Parents can schedule allowances, make deposits, link their accounts, and deposit checks in their child's name via the mobile app. Children can view their account balance, but an adult co-owner must sign in to transfer funds.

Your child can set up an automatic savings plan to move money to their savings account on a set schedule. They can also establish multiple accounts, letting them track multiple savings goals simultaneously.

Upon turning 18, the Kids Savings Account becomes an adult Capital One 360 Performance Savings account.

Alliant Credit Union Kids Savings Account

If you want to show your child the benefits of working with a credit union, Alliant is a solid choice.

Alliant is an online credit union, so anyone can open an account. To become a member, you need to either be a current or former employee at an Alliant partner business, be a related to (or a domestic partner of) a current or former employee of an Alliant partner business, live in work in a community near Alliant’s headquarters, or be a member of Foster Care to Success.

With this savings account, you can earn up to 3.10% on your money. Plus, you won’t have to worry about any monthly fees as long as you elect to receive digital statements. You will need to make a $5 initial deposit to open an account and maintain a balance of $100 to earn interest.

This joint bank account allows both parents and children to be owners, with parental approval required for any account activity. Parents can set up automatic deposits, while children can track their balance and make their deposits. Once your child turns 13, they can open a teen checking account with Alliant and start using a debit card.

PNC Bank S is for Savings® Account

PNC offers an interactive savings account that helps your child learn how to save and spend. You can start by working with your child to open a checking account with no minimum balance or monthly fee to worry about. You can then add a savings account, which also has no fee and only requires a $1 balance to earn interest.

What sets this account apart is its educational resources, including a Sesame Street money workshop and an online experience that allows kids to allocate their money into saving, sharing, and spending jars.

PNC makes it easy for your child to access their funds with 60,000 fee-free ATMs, and you’ll also get $20 in out-of-network ATM fee reimbursements per month. There’s no minimum initial deposit and a monthly service fee of $5, which can be waived for account holders under 18.

PenAir Federal Credit Union Level Up Savings Account

PenAir Federal Credit Union offers two dedicated accounts geared toward children. The Level Up Savings Account targets children from birth through 18 years old. There are no monthly fees, but you need to deposit at least $25 to open the account.

A major downside of the savings account is that it offers relatively little interest. However, the account comes with money management tools and financial education resources you can use to teach your child about money, which may make it appealing to some families.

Bethpage Federal Credit Union Student Savings Account

Bethpage Federal Credit Union offers a Student Savings Account for teenagers. The minimum deposit to open an account is just $5; you can earn 5% APY on balances up to $1,000.

The account is convenient for older kids because it has no overdraft fee and offers a $1,000 ATM withdrawal limit. This can help teens learn how to manage both online banking funds and cash.

Children under 18 must co-sign the account with an adult. The adult account holder can easily check the child’s account balance and deposit checks for them via the mobile app.

This credit union is open to anyone with a $5 minimum share account.

Why open a savings account for your child? 

Opening a savings account for your child can be an important step in teaching them valuable financial literacy skills and helping them develop good money habits from a young age. Here are some key benefits: 

Teach financial responsibility 

When children have their own savings account, they can start to learn important concepts like budgeting and goal-setting. By involving them in the process of saving and watching their balance grow over time, you can help them understand the value of money and the importance of responsible spending and saving.

Encourage good savings habits 

By making saving a regular part of your child's financial routine from a young age, you can help instill positive habits that can last a lifetime. Many youth savings accounts offer tools like automatic transfers or round-up programs that can make saving a seamless part of your child's life.

Take advantage of compound interest 

The earlier your child starts saving, the more time their money has to grow through the power of compound interest. Even small amounts saved consistently over time can add up to significant sums by the time your child reaches adulthood.

Provide a safe place for gift money 

Birthdays, holidays, and other special occasions often come with monetary gifts from family and friends. A dedicated savings account for your child provides a safe and secure place to store this money and watch it grow.

Prepare for future expenses 

Whether it's saving for a car, college tuition, or a down payment on a future home, a savings account can help your child work towards their long-term financial goals. By starting early and making saving a habit, your child can be better prepared for the expenses that come with adulthood.

What to look for in a kid's savings account 

When choosing a savings account for your child, there are several key factors to consider beyond just the interest rate. 

Low or no minimum balance

Many youth savings accounts have low or no minimum balance requirements, which can make it easier for kids to get started with saving. Look for an account that doesn't require a large initial deposit or ongoing balance to avoid fees.

Competitive interest rate 

Interest rates on savings accounts vary depending on the financial institution. Compare options from different banks and credit unions to find an account with a competitive rate that can help your child's savings grow faster.

No monthly fees 

Look for a savings account that doesn't charge monthly maintenance fees, which can eat into your child's savings over time. Many youth accounts waive these fees, but it's important to read the fine print and understand any potential costs.

Accessibility 

Consider how easy it is for your child to access and manage their account, as well as what level of parental oversight and control you'll have. Look for features like online and mobile banking, automatic transfers, and customizable alerts and limits.

Educational resources 

Some youth savings accounts come with additional educational resources, such as interactive games, worksheets, or online tutorials designed to teach kids about money. These tools can be a valuable supplement to the hands-on learning your child will get from managing their own account.

How to open a savings account for your child 

Once you've chosen the best savings account for your child's needs, the process of opening the account is generally straightforward. Here are five steps to follow. 

1. Gather your documents 

You'll typically need to provide some basic information and documentation to open a youth savings account, including: 

• Your child's Social Security number or Individual Taxpayer Identification Number (ITIN) 
• Your child's date of birth and contact information 
• Your own identification and contact information as the parent or guardian
• Any required minimum deposit amount

2. Choose an account type

If the bank or credit union offers multiple youth savings account options, choose the one that best fits your child's needs in terms of interest rates, minimum balances, and other features.

3. Apply for the account 

Most banks and credit unions allow you to open a youth savings account online, although some may require you to visit a branch in person. Complete the application with your child's information and your own information as the parent or guardian.

4. Fund the account 

Once the account is open, you'll need to make an initial deposit to fund it. This can often be done through an electronic transfer from another account, or you may need to mail in a check or make a deposit in person.

5. Set up account management access

Work with your child to set up online and mobile banking access, customize account alerts and notifications, and establish any recurring transfers or savings goals. Be sure to review account statements and activity together regularly to help your child understand how their money is growing and to identify any potential issues.

Teaching your child to manage their savings 

Opening a savings account is an important first step in teaching your child financial literacy skills, but it's not the only one. Here are some additional tips and strategies for helping your child learn to manage their money. 

Set savings goals together 

Work with your child to identify short-term and long-term savings goals, such as saving for a new toy, a special outing, or a future car or college expenses. Help them break these goals down into achievable milestones — and don't forget to celebrate progress along the way.

Make saving a regular habit 

Encourage your child to make saving a regular part of their financial routine, whether it's setting aside a portion of their allowance each week or month, or participating in a round-up or automatic transfer program through their savings account.

Discuss spending decisions 

When your child wants to make a purchase, use it as an opportunity to discuss budgeting, prioritizing, and making trade-offs. Help them understand the difference between wants and needs, and encourage them to think critically about their spending decisions.

Lead by example 

Children often learn by observing and mimicking their parents' behavior, so it's important to model good financial habits yourself. Share your own financial goals and budgeting strategies, and involve your child in age-appropriate money management tasks and decisions.

How we rated the best savings accounts for kids 

To determine the best savings accounts for kids and teens, we carefully evaluated a wide range of factors, including interest rates, fees, minimum deposit and balance requirements, and product mix.

Our team analyzed numerous bank offers and selected the top contenders based on these key criteria. The options on this list represent the best value benefits available.

Here are some of the key factors we considered:

• Interest rate: The interest rate is the primary reason someone would choose a savings, CD, or money market account over another, so this is our most heavily weighted factor. 
• Fees: Low fees can help minimize the cost of managing your money and accessing essential financial services, allowing you to keep more of your hard-earned cash.
• Minimum deposit & balance requirements: High minimum deposits can be a barrier, and high balance requirements to avoid fees or earn the best rate limit the account's usefulness.
• Product mix: A diverse product mix allows customers to find the right financial solutions for their unique needs and goals. 
• Customer service: Reliable customer service is essential for a positive banking experience. 
• Digital experience: With more banking done online, the quality of an account's digital offerings is increasingly important.
• ATM & branch access: Access to ATMs and branches gives bank customers the flexibility to handle their banking needs in person when necessary while also providing easy access to cash when they need it.

Frequently asked questions

What is the best savings account for a child?

The best savings account for a child will depend on factors like interest rates, minimum balance requirements, fees, and available educational resources. Some top options include Capital One's Kids Savings Account, Alliant Credit Union's Kids Savings Account, and PNC's 'S' is for Savings Account.

How old does my child need to be to open a savings account?

The minimum age to open a savings account varies by bank or credit union, but many offer accounts for children as young as newborns, with a parent or guardian as a joint account holder.

How much money should I have my child save?

The amount your child should save will depend on their age, financial goals, and overall financial situation. A common rule of thumb is to have them save at least 10-20% of any money they receive, whether it's from gifts, allowance, or earned income.

Can I transfer money from my own account into my child's savings account?

Yes, most youth savings accounts allow parents or guardians to make transfers or deposits into the account. Some even offer features like automatic transfers or round-up programs to make saving easier.

Are there any tax implications for youth savings accounts?

In most cases, youth savings accounts are subject to the same tax rules as adult savings accounts. If the account earns more than $2,200 in interest income per year, you may need to file a tax return on your child's behalf. 

The bottom line

Opening a savings account for your child can be a great way to set some money aside for them and start educating them about managing their own money. While you should always consider rates and fees, it’s worth looking into accounts that offer added educational tools.

Editorial disclaimer: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.