Savings Accounts for Kids
Learning smart money habits at an early age can help children build confidence and gain valuable financial literacy to set them up for success as they grow. A savings account is a great starting place for teaching your child some of the basics of how to manage money responsibly.
For many people, financial wellness can be a stressful and confusing topic. But as with most things, the more familiar you are with a subject, the less intimidating it becomes. Which is why having conversations about money management with your children when they’re young can help them feel more comfortable and confident as they grow into financially independent adults.
While we appreciate a good piggy bank or coin jar, opening a savings account with your child is a great place to start that conversation. A savings account introduces the basics of finance—like deposits, withdrawals, and interest. To find the right savings account for your child, we have a few tips to consider:
Types of Savings Accounts for Kids
There are generally two types of accounts that are available to children: a traditional savings account or a custodial account.
- A traditional savings account allows you to open an account in their name, but with joint access and the ability to monitor activity. Some states have laws around minors and savings accounts, so it’s helpful to check with your financial institution about your options.
- A custodial account, on the other hand, treats savings as gifted assets–meaning your child has full ownership of the account, but can’t access it until they turn 18. This type of account has more complicated tax considerations, so a traditional savings account is a simpler option.
What Benefits to Look For
While you may be looking for accounts with specific features based on what your goals are for your child, we would recommend finding an account with no monthly fees, no minimum deposits or balance, and a good interest rate. Many financial partners offer accounts specific for children, like our Start Up Savings and Checking accounts.
From there, you may consider what other learning opportunities an account will provide your child, including online banking, depositing cash or checks, visiting a brick-and-mortar branch location, or using a debit card and ATM.
Whether you choose to get a savings account, checking account, or to just stick with the piggy bank a while longer, there are many ways to teach healthy financial habits. Practice saving for a short-term goal or making a budget together–financial planning can be fun and educational!