Best Savings Accounts for Kids and Teens for September 2024—Rates Up to 7%

The Bottom Line

When shopping for a bank account for kids that pays interest, offers a well-designed parent- and kid-focused mobile experience, and provides an easy on-ramp for your child to advance to teen checking, Capital One has all of your bases covered. It offers great options for growth with its youth savings accounts, especially with no minimum balance or fees. Plus, the mobile app has parental controls so you can help your kids make and achieve their savings goals.

Compare the Best Kids and Teen Savings Accounts

What is a Kids Savings Account and How Does It Work?

Kids or youth savings accounts are bank or credit union deposit accounts that are available only to customers younger than 21—though they're sometimes capped at age 12 or 18. They provide a way for young savers to deposit funds and earn some interest, but also serve as a way for kids and teens to get familiar with how banking works. By establishing a relationship with a financial institution, learning how to handle things like online banking, and seeing the interest they've earned at the end of each month, a first bank account provides practical training for a child.

The best kid and teen savings accounts actually pay higher interest rates than adult accounts as a way to incentivize young savers. However, the balances on which those higher interest rates apply often are capped. What the savings account earns may also be changed based on your child's age. For instance, the account may pay a high rate to younger savers, but once they turn 18, their account may be converted to an adult account with a lower rate.

Types of Bank Accounts for Kids and Teens

For individuals younger than 18, banks and credit unions most commonly offer some kind of savings account. But the account types they offer can vary, such as:

• Children's savings account
• Youth savings account
• Teen savings account
• Teen checking account
• Student account (these often are available to those over 18)

If the child for whom you are opening the account is a minor, you or another adult will need to put your name on the account as well. That makes it a joint account, since those under 18 are prohibited from holding bank accounts on their own. Besides a parent, other common adults to use for a joint account with a child are a grandparent, an aunt or uncle, an adult sibling, or a guardian.

Is a Kids Savings Account a Good Idea?

Knowing how to manage one's money is an important life skill—and opening a savings account for a kid or a teen is a great way of teaching your child money skills by letting them dip their toe in the world of personal banking. It's also ideal for them to have this experience while they're still a minor and you're connected to the same account as a joint owner. That way you can help them manage the account and teach them money management and banking skills along the way.

Pros and Cons of Savings Accounts for Kids and Teens

Pros

• No fees: Kids' savings accounts are typically free, so there are no monthly maintenance or account fees. 
• Low minimums: Since children are unlikely to have large sums of money to deposit, savings accounts for kids tend to have low minimums; children can open a savings account with a minimum opening deposit as low as $0. 
• Parental controls: Many kids' savings accounts have parental controls, so parents can set limits on how much money kids can transfer or withdraw. 

Cons

• Age limits apply: Kids' accounts are only available until a specific age. After that, the account is transferred to another account for different age groups, and the new account may have higher fees. 
• Higher APYs only on small amounts: Many savings accounts geared toward children boast high annual percentage yields (APYs). But those higher APYs usually apply only to a small portion of the child's account balance, such as the first $500. 
• ATM and debit cards: Some kids and teen savings accounts will offer an ATM card, but others do not. And if you want your child to have a debit card, you'll need to open a kids or teen checking account. The majority of these will specify a minimum age for debit card access,

Common Savings Account Terms to Understand

• Minimum opening deposit or initial deposit: Some bank accounts—whether a savings, checking, or money market account—stipulate a minimum deposit you need to make to open the account.
• Minimum balance requirement or ongoing balance: Unlike a minimum initial deposit, a minimum balance requirement refers to the least amount of money you can keep in the account on an ongoing basis. Falling below the minimum requirement could mean being hit with a fee, or could instead mean you won't earn the high-yield interest rate on the account.
• Monthly maintenance fee: Most youth accounts don't have a monthly maintenance fee, but be sure to check for any account you're considering.
• Mobile check deposit: The ability to deposit checks using the camera on your smartphone is called mobile check deposit, and most institutions' mobile apps offer this feature.
• External or ACH transfer: The electronic process of moving funds between two financial institutions is called an external or ACH transfer. Virtually every youth account will allow you to send or receive external transfers, but sometimes it must be initiated by the adult on the account.
  

How to Choose a Savings Account for Your Child

Choosing the best account for your child or teen comes down to shopping around to familiarize yourself with the various options and then choosing the financial institution and account that best meets your most important needs. Here are some things to consider:

• How old is your child? The age of your child and how you expect them to use the account. For instance, if they are very young and you just want to have a place where they can deposit birthday checks from their grandparents and have their money earn some interest, you may prioritize earning a high interest rate.
• Do you want a teen debit card? If instead you have a child who is—or soon will be—a teen, you may value them having an account that provides a debit card, but also a good mobile app they'll find easy to use. Being able to transfer money from checking to savings is also a useful feature.
• How much oversight do you want to have? Having parental controls so that you can see what they have spent using their debit card may also be among your priorities.

In the end, choosing a kids bank account is similar to choosing one for yourself. First you'll need to decide what features are most valuable to you, and then find the account that checks the most of those priority boxes.

How to Open a Kids or Teen Savings Account

Most banks and credit unions, including those recommended above, allow online account opening, making it easy to start the process at home and on your schedule. It will include the following stesp:

1. Gather your information - When opening a financial account for your minor child, you'll need to provide their social security number, so be sure you have this available before you get started.
2. Start the online account opening process - Go to the institution's website and look for the button or link to "Open an Account". Note that for accounts being opened at a credit union, you'll need to establish membership. But this is generally easy and usually possible at the same time as opening the account.
3. Provide your personal information - Like opening any other bank account, you'll need to provide various personal information for your child, as well as for yourself since any applicant who is a minor will require an adult to serve as the primary account holder.
4. Provide identification - Either during the online application process or in a follow-up step, you'll most likely need to upload a copy of your photo identification, such as your driver's license. Some institutions will ask for additional documentation.
5. Fund the account (optional) - After the account is open, you may choose to fund it with money transferred from another institution. Sometimes you can do this during the account application process, while other times you can link an external account using digital banking a few days after the account has been opened.
6. Enroll in online banking - You'll want to establish online banking for yourself, and possibly for your child, depending on their age and if they will interact with their account directly. Some banks allow you to do this as part of the account opening process, while others make it a separate step, perhaps a day or more after completing the account application.

Alternatives to Savings Accounts for Kids and Teens

There may be times when your child needs access to bank accounts and services other than savings accounts. Depending on their needs, and perhaps any financial goals you have for them, one of the following alternatives may be a better fit.

• Debit Cards for Teens - For kids learning how to manage money, debit cards designed for children and teens can be helpful. These cards give children access to cash up to a parent-specified limit, and they usually provide budgeting and financial educational resources too.
• Checking Accounts for Teens - For teens that have started working and may need regular access to their bank account, a checking account may be a better choice than a savings account. Although it's unlikely to pay any interest, a checking account allows the teen to make withdrawals via debit card, and doesn't limit their number of withdrawals per month.
• Student Bank Accounts - For teens and young adults that may be too old for a kids' savings account, a student bank account can be a useful alternative. These accounts are specifically designed for college students with low account minimums and no monthly fees.
• Custodial Accounts - If you want to save for a child's future, you can put money in a custodial account like a Uniform Gift to Minors Act (UGMA) account or Uniform Transfers to Minors Act (UTMA) account. You can contribute money and choose how to save or invest it, and when the child reaches the age of majority for their state, they'll take ownership of the account. They can withdraw money to pay for college, buy a car, or purchase a first home.
• Certificates of Deposit (CD) - If you know your child won't use some of the funds in their account for a year or more, you might want to put some of their savings in a certificate of deposit. CDs are bank accounts that typically offer a higher rate than a standard savings account in exchange for you agreeing to keep the funds there for a set period of time. While the interest rate on savings accounts can change at any time, a CD's rate is locked in until the term ends.
• Brokerage Account - If your goal is to put away long-term savings for your child, you may want to consider opening a brokerage account in their name and investing funds in a stock market index fund—rather than holding it in a simple savings account. While savings accounts are safe and prevent you from losing money, funds held in the stock market over a decade or longer will generally grow a great deal more.
• 529 Plans - For parents and family members that want to help a child pay for college, a 529 college savings plan can be an excellent option. It's a tax-advantaged investment account that allows family members to contribute money for the child's future education. The money is invested and can grow tax-deferred, and if the withdrawals are used to pay for qualifying expenses, the withdrawals are also tax-free.
  

Why You Should Trust Us

Every day, Investopedia researches, rates, and reviews hundreds of financial products and services, covering the personal finance categories of bank accounts, savings vehicles, credit cards, insurance, brokerages, robo-advisors, loans, and retirement accounts. When reviewing bank accounts for kids and teens, we look at factors that will help readers choose the best account for their child and their family. Investopedia launched in 1999 and has been helping readers find the best kids bank accounts since 2021.

How We Picked the Best Savings Accounts for Kids and Teens

We began our research by first identifying almost two dozen youth savings accounts that are available to consumers nationwide and that pay at least 0.25% APY. From there, we dug into the details to find those that charge no fees, offer the highest interest rates, allow the highest balances, and offer a complimentary checking or spending account. We also considered the age limits of each account, the mobile app features, and any added perks offered by the account, enabling us to distill the list down to these top five contenders.

Investopedia was founded in 1999, and has been reviewing kids' savings accounts since 2019.

Guide to Savings Accounts for Kids and Teens

• What Is a Custodial Account?
• How to Open a Kids Banking Account
• How to Open a Brokerage Account for a Child
• How to Open a CD for a Child
• How Much Does it Cost to Open a Custodial Account?
• Best Debit Cards for Kids and Teens
• Best Checking Accounts for Teens
• Best Custodial Accounts
• Financial Literacy for Kids