Savings accounts for kids are custodial or joint deposit accounts that let a parent or guardian manage money on behalf of a minor while the child learns how saving, interest, and banking actually work. They typically pay a modest interest rate, carry no or low fees, and require an adult co-owner until the child reaches a certain age.
Key Takeaways
- Most kids' savings accounts require a joint adult owner until the child turns 18, though rules vary by bank and account type.
- Interest rates on youth savings accounts are usually modest, so treat the account as a teaching tool first and a growth vehicle second.
- Banks, credit unions, and some online-only institutions all offer versions, each with different fee structures and age cutoffs.
- Custodial investment accounts (UGMA/UTMA) are a separate option for long-term growth, distinct from a basic savings account.
- Look closely at minimum balance rules, monthly fees, and what happens automatically when the child becomes an adult.
What Makes an Account a Kids' Savings Account
A savings account built for children is structurally similar to any other savings account: it holds cash, pays interest on the balance, and allows deposits and withdrawals within certain limits. The difference is ownership and control. Most institutions require a parent or legal guardian to be a joint owner or custodian on the account while the child is a minor. The adult can typically view transactions, set up automatic transfers, and in many cases restrict the child's ability to withdraw funds without approval.
Some accounts are structured as true joint accounts, where both the parent and child have equal legal rights to the money. Others are custodial accounts, where the child is the legal owner of the funds but the adult manages the account until the child reaches the age of majority in their state, commonly 18 or 21. That distinction matters for tax purposes and for who technically controls the money once the child becomes an adult.
How Savings Accounts for Kids Compare Across Banks and Credit Unions
Options range from big national banks to local credit unions to online-only banks. Each has trade-offs worth weighing before opening an account.
| Account Type | Typical Interest Rate | Fees | Best For |
|---|---|---|---|
| Traditional bank youth savings account | Low, often below the national average for savings | Usually no monthly fee if linked to a parent's account | Families who want in person branch access and simplicity |
| Credit union youth savings account | Often slightly higher than big banks | Low or no fees, sometimes a small membership deposit required | Families already banking with a local credit union |
| Online bank youth or joint savings account | Frequently higher than brick and mortar banks | Typically no monthly fees, no minimum balance | Tech comfortable families prioritizing higher yield |
| Custodial investment account (UGMA/UTMA) | Not interest based; returns depend on market performance | Brokerage fees vary, many now fee free for basic accounts | Long term growth beyond a simple savings goal |
| Prepaid debit card with savings feature (teen focused apps) | Sometimes offers a bonus rate on a small savings balance | May charge a monthly subscription fee | Teens who want spending and saving tools combined |
Interest rates on savings products move with broader market conditions, so treat any specific number you see advertised as a snapshot rather than a permanent feature. What tends to stay consistent is the relative pattern: online banks and credit unions often pay more than large traditional banks, and youth accounts rarely lead the market since they are designed around accessibility and education rather than maximizing yield.
Eligibility, Age Limits, and What Happens at 18
Eligibility rules differ by institution, but a few patterns are common. Many banks allow a savings account to be opened for a child of any age, from infancy through the teen years, as long as a parent or guardian co-signs. Some institutions set a minimum age, often six or seven, on the theory that the account should coincide with a child starting to understand money.
Age 18 is the pivot point for most accounts. At that point, many banks automatically convert the account to a standard individual savings account in the young adult's name, removing the parent as a joint owner unless the family requests otherwise. Custodial accounts governed by UGMA or UTMA rules transfer full control to the child at the age of majority set by their state, which can be 18 or 21 depending on where the family lives. It is worth asking directly what your bank's process looks like well before your child reaches that age, since some conversions require paperwork or a branch visit.
Fees, Minimum Balances, and Withdrawal Limits to Watch
Even fee friendly accounts can carry conditions. Some require a minimum opening deposit, though it is usually small. Others waive monthly fees only if the account is linked to a parent's checking account or if a minimum balance is maintained. Federal rules that once capped the number of monthly withdrawals from savings accounts have loosened, but individual banks may still set their own transaction limits or charge for excessive withdrawals, so check the account's specific terms.
How to Open a Savings Account for a Child
- Decide whether you want a straightforward savings account, a custodial investment account, or a teen focused debit and savings app, based on your goals for the money.
- Compare a few banks, credit unions, or online institutions on interest rate, fees, and minimum balance requirements using the table above as a starting framework.
- Gather documentation: the parent's government issued ID, Social Security numbers for both parent and child, and the child's birth certificate if requested.
- Apply either in a branch or online, depending on the institution. Many youth accounts can be opened entirely online if the parent already banks there.
- Fund the account with an initial deposit, then consider setting up small recurring transfers so the child sees the balance grow over time.
- Review the account periodically, especially as the child approaches 18, to understand how ownership will transfer and whether you need to take any action.
Where This Fits Into a Child's Broader Financial Education
A savings account alone will not make a child financially literate, but it gives parents a concrete, low stakes way to talk about interest, goals, and patience. The real value tends to come from the habits built around the account: setting a savings goal for a bike or a game console, watching a small interest payment post, or deciding together how much of a birthday check to save versus spend. As the child gets older, the account can serve as a bridge to more advanced tools like a teen checking account, a debit card with parental controls, or eventually a custodial brokerage account for longer term goals.
Frequently Asked Questions
What savings account for kids?
There is no single required product; families typically choose between a traditional bank or credit union youth savings account, an online bank's joint savings option, or a custodial investment account, depending on whether the priority is easy access, higher interest, or long term growth.
What are bank accounts for kids?
These are deposit accounts, usually savings or checking, opened in a child's name with a parent or guardian as joint owner or custodian, designed to let minors hold and grow money while an adult retains oversight until the child reaches adulthood.
What bank has accounts for kids?
Most major national banks, community banks, credit unions, and several online only banks offer some form of youth or custodial savings account, so availability is broad; the better question is which institution's rates, fees, and age rules best fit your family.
Is there bank accounts for kids?
Yes, youth savings and custodial accounts are widely available at banks and credit unions, generally requiring a parent or guardian to co-own or manage the account until the child reaches a set age, often 18.
How to open bank accounts for kids?
A parent or guardian brings identification, the child's Social Security number, and sometimes a birth certificate to a bank or credit union, or completes the same steps online, then makes an initial deposit to activate the account.
What Families Should Decide Before They Sign Up
The open question for most parents is not whether to open a savings account for a child but which structure best matches their goals: a simple, low yield account that teaches basic habits, or a custodial account with growth potential and less parental control down the road. Answering that honestly, before comparing rates and fees, makes the rest of the decision much easier.
