Kids Savings Accounts: What You Need to Know

Opening a savings account for a baby or a child can be a good way to begin teaching good money habits. Your child might already know about bank accounts from books or TV. But if they ask where money comes from or how to have their own, they might also be ready for a savings account.

A savings account provides your child with a glimpse into how banks and credit unions work and gives them a place to stash allowance and birthday money. It also gives them the opportunity to grow their money with interest.

Here are answers to common questions about savings accounts for kids.

Is my child old enough for a savings account?

Your child is most likely old enough for a savings account. Kids’ savings accounts typically require a parent or guardian to have joint ownership or control. That means you can manage the finances until your child is ready to manage them. Because of that setup, your child probably won't have to meet a minimum age requirement to open an account. You could even open a savings account for a baby. 

» Check out NerdWallet's best savings accounts for kids

What makes a good kids' savings account?

The best kid savings accounts have a few features in common, including strong savings rates. Bank accounts typically require an adult to apply, so a standard account in a parent or guardian’s name — even if it isn’t marketed to kids — could be an option. Keep an eye out for the following:

No minimum balance requirement or monthly maintenance fees

Saving should be a good thing. Don’t let fees diminish what your child puts into their account.

An above-average interest rate

The national average savings rate is currently 0.43%. At some of the biggest national banks savings rates are even closer to zero. But many credit unions and online banks offer better yields. The more interest an account earns, the faster your child’s bank balance can grow.

Easy online access

Check for features such as mobile apps with high ratings in the app stores, electronic statements and a solid website where you can check your transactions. The ability to accept mobile check deposits and make transfers from linked accounts is also a plus.

How do I open a savings account for a baby or child?

Opening a savings account for your child isn't much different from getting a new account yourself. As the adult, you’ll need identifying information, such as a driver’s license, passport or other government-issued photo ID. You’ll also need to provide basic information for both of you, including your and your child’s birthdays and Social Security (or taxpayer identification) numbers.

Some banks will require a minimum opening deposit, such as $25. Others don’t have any minimum opening deposit.

Should my child also use a debit card or banking app?

There’s no need to rush to open additional accounts if you feel your child isn’t ready.  But if your child is at a point where they  to make regular purchases from merchants and can begin to practice budgeting, a kid-focused debit card or banking app could be a solid option. They have features similar to online checking accounts, such as the ability to track spending, set budget goals and set up transfers. Parents or guardians can open these accounts on behalf of their children, and are able to set spending limits and keep tabs on purchases.

Lifelong lessons

Learning good saving and spending habits are valuable life lessons, and they take time to learn. Opening a savings account for your child is one of the best ways to introduce these concepts at an early age.