:max_bytes(150000):strip_icc()/SabrinaKarlBio-fec3f52216e94fc5b9dfea3f4b794140.jpeg)
:max_bytes(150000):strip_icc()/HeadshotThomasBrock03.08.20-ThomasBrock-924a228f9b25436183c3d61b0fc6f263.jpeg)
:max_bytes(150000):strip_icc()/ScreenShot2021-09-01at4.53.13PM-2f005dc3c4934b8d9a5ed37a1eb18a92.png)
We independently evaluate all recommended products and services. If you click on links we provide, we may receive compensation. Learn more.
Many banks and credit unions offer special kids' savings accounts that enable your young child or teen to “level up” from a piggy bank in their bedroom and begin learning how to save and use a bank account. Whether you want to help build your child’s balance or your child needs an account to bank their income from an allowance or a part-time job, a youth savings account provides an opportunity to earn some interest, while also learning how to bank and build a savings habit.
To choose the best savings accounts for kids, pay attention to the interest rate, any fees or minimum balance requirements, the way you and your child can access the funds, and how the account can grow with them as they mature. We’ve done the research for you, building an expert list that makes it easy to choose a winning account based on what you and your child value most.
The Best Savings Accounts for Kids for 2023
- Best Overall: Capital One’s Kids Savings Account
- Best for Young Children: USAlliance Financial’s MyLife Savings for Kids
- Best for Teens: Alliant Credit Union’s Kids Savings Account
- Best for Maximizing Interest: Spectrum Credit Union’s MySavings Youth Account
- Best for Substantial Savers: Northpointe Bank’s Kids’ Savings Account
Best Overall : Capital One’s Kids Savings Account
:fill(white):max_bytes(150000):strip_icc()/CapitalOne-d45d323d03dc48d7a68e8d8c586dd7bf.jpg)
Capital One
- Age Limits: Up to age 18, checking available at 8
- Minimum Balance: $0
- Interest Rate: 2.50% APY
With interest paid on any balance amount, excellent mobile banking tools, the ability to establish multiple savings goals, and the option to grow into a youth checking account with a debit card, Capital One’s Kids Savings Account is our winner for the all-around best youth savings account.
Interest is paid on any balance
No minimum balance and no fees
A top-rated mobile app that includes parental controls
Availability of a Teen Checking Account with debit card
Interest rate is lower than other options
Multiple savings goals require opening multiple accounts
No ATM fee refunds on the checking account
Capital One has put more thought and effort into youth banking than a lot of its competitors, creating not only two account types for kids and teens but investing resources into developing kid- and parent-centric mobile app experiences specific to these accounts. Combined with no minimum balance to earn interest, no fees, and the ability to advance to a teen account with a debit card, these features make Capital One our overall pick for Best Kids Savings Account.
No matter how much or how little your child has in their savings account, Capital One pays the same rate. Though it typically isn't the highest rate you can earn on a youth account, the absence of a minimum or maximum balance makes it versatile. In addition, if your child moves into or adds a Teen Checking Account at Capital One, they’ll earn a little bit of interest on that account balance, too.
Interacting with the account is enhanced for both kids and parents by the well-designed mobile banking app, which enables automatic transfers from parent accounts to the youth account (think automated allowance payments) and the establishment of savings goals that will motivate your child to keep saving. The app is even more robust for the Teen Checking Account, offering separate parent and teen interfaces and providing parental controls.
Capital One’s Teen Checking Account is slightly misnamed, as it’s available to any child age eight or older. This provides earlier access to a debit card than accounts that reserve this feature for kids ages 13 and up.
See the full Capital One review.
Best for Young Children : USAlliance Financial’s MyLife Savings for Kids
:fill(white):max_bytes(150000):strip_icc()/USAlliance-841bfcc2a9224cd5837ee619acae8e40.jpg)
USAlliance
- Age Limits: Up to age 12, checking available at 13
- Minimum Balance: $0
- Interest Rate: 2% on first $500
For parents starting their child’s account at a very young age, it’s hard to do better than USAlliance’s MyLife Savings for Kids account. Its annual birthday bonus for pre-teen savers helps make it our top savings account choice for young children.
$10 in “birthday bucks” paid every year through age 12
Highly competitive interest rate on the first $500
Ability to move into a checking account at age 13
Joining the credit union is easy and virtually free
No ATM or debit card access until age 13
Credit union membership is required for both parent and child
Some other accounts pay interest on the whole balance
USAlliance understands how much children love birthday gifts, and parlays that into a reward for kids having their own savings account. By paying those under 13 a $10 birthday bonus every year, plus a generous interest rate on their first savings, USAlliance’s MyLife Savings for Kids wins our award for best youth account for young savers.
The earlier you open one of these for your child, the more “birthday bucks” they’ll score. They’ll also earn a highly competitive 2.00% APY on their balances up to $500. Very few youth accounts currently pay above 1%, so the earning potential here is significantly higher than most other options.
USAlliance also offers a MyLife Checking for Teens, allowing your child to add the more advanced account as they mature. They can open a MyLife Checking at age 13, and choose to receive an ATM or debit card at that time. Meanwhile, they can retain their MyLife Savings account to continue earning a high interest rate on up to $500 in savings.
Though USAlliance Financial is a credit union, it is open for anyone nationwide to join.
Best for Teens : Alliant Credit Union’s Kids Savings Account
:fill(white):max_bytes(150000):strip_icc()/Alliant-a34ee57c611d4e40bb55115475e2aff9.jpg)
Alliant Credit Union
- Age Limits: Up to age 12, checking available at 13
- Minimum Balance: $100 (to earn interest)
- Interest Rate: 3.10% APY on $100+
Alliant Credit Union starts your child’s saving journey outright with a competitive interest rate, no fees, and an excellent mobile banking app designed for kids and parents. Then as your child ages, Alliant’s Teen Checking provides even more useful features, making it our pick for the best savings account for teens.
Competitive interest rate
Mobile banking app that provides child- and parent-friendly features
Teen checking account with debit card available at age 13
Teen checking pays interest and offers ATM fee refunds
Interest is only paid when balance is $100 or more
No ATM or debit card before age 13
Some youth accounts pay higher interest, although only on limited balances
For younger children, learning how to bank is an evolving process, and Alliant provides an excellent Stage 1 option with its Kids Savings Account, followed by an even more impressive Stage 2 option with its Teen Checking Account. Both pay competitive interest and offer well-designed mobile app experiences geared specifically toward kids and parents.
An Alliant Kids Savings Account can be opened for children 12 and younger. Anytime the account balance exceeds $100, Alliant will pay a respectable 3.10% APY (as of May 2023) with no maximum balance for earning that rate. The account can be accessed with a mobile banking app that has parents and kids in mind; it lets parents set automated recurring deposits into their child’s account and allows the child to monitor their balance, deposit birthday checks, and track progress toward a savings goal.
Once your child turns 13, they can add an Alliant Teen Checking Account and ATM/debit card. This is one of the best youth checking accounts nationally available, paying more interest on checking balances than most other accounts. The account has a 0.25% APY. What’s more, Alliant offers free ATM transactions at more than 80,000 ATMs nationwide, as well as up to $20 per month in ATM fee reimbursements.
Though Alliant is a credit union, joining is open to everyone and is both easy and free. In fact, Alliant will even contribute the $5 initial deposit into your child’s savings account.
Best for Maximizing Interest : Spectrum Credit Union’s MySavings Youth Account
:fill(white):max_bytes(150000):strip_icc()/SpectrumCreditUnion-07eb1e2f97b740e0811fcd58e296cde5.jpg)
Spectrum Credit Union
- Age Limits: Up to age 21
- Minimum Balance: $0
- Interest Rate: 7% APY on first $1,000
With the interest rate on Spectrum’s youth savings account so high it looks like a typo, the credit union earns our top marks for maximum interest earnings in a kid's account.
Pays the highest nationally available APY on a savings account, on your first $1,000
Account can be held until age 21
Account holders age 13 and up can request an ATM card
No accompanying teen checking account available
Limited to one MySavings Youth Account per individual
Joining the credit union is not free for most people
With bank interest rates as low as they currently are, it’s hard to believe Spectrum’s youth savings account rate of 7% APY. However, this rate only applies to balances up to $1,000. This is the highest rate we found (by a mile) for any nationally available youth savings account (or adult account, for that matter), making it an easy choice for the best youth account to maximize interest.
Spectrum doesn’t offer a teen checking account, but it does allow kids to keep their MySavings Youth Account (and its stellar interest rate) longer than most other banks do, all the way through the age of 21. It also allows those ages 13 and up to opt for an ATM card. Account balances above $1,000 revert to the Primary Share Savings APY of 0.75%.
As a credit union, Spectrum does require joining in order to open an account, and though the process is easy, it is not free. Unless someone in your family is eligible through their employer or geographical residency, individuals must pay membership fees or donations to an affiliated nonprofit organization to gain Spectrum eligibility. In addition, a member must hold $25 in a savings account (though you will get this back should you ever end your credit union membership).
One side note is that Spectrum has a sister institution, Chevron Federal Credit Union. Though the eligibility rules are the same for those who don’t qualify another way, Chevron is open to a different set of employees and geographical residents, so it’s worth checking if you qualify for one or the other to avoid paying.
Best for Substantial Savers : Northpointe Bank’s Kids’ Savings Account
:fill(white):max_bytes(150000):strip_icc()/NorthpointeBank-5c08343446e0fb000167aed1.jpg)
Courtesy of Northpointe Bank
- Age Limits: Up to age 18
- Minimum Balance: $10
- Interest Rate: 1.50% APY up to $1,000, 1.50% to 1.12% APY up to $9,999.99, 1.12%-0.35% for $10,000+
Northpointe Bank’s Kids’ Savings Account is a bit more basic in features than some of the others. But what it has going for it is a high interest rate that’s available with relatively high balances, earning it our award for best youth savings account for substantial savers.
Much better than average interest rate on balances beyond $10,000
No fees
Since it’s a bank, requires no membership
Fewer bells and whistles than other accounts
On the first $1,000, some accounts pay more interest
No available teen checking account
For kids and teens with a lot of cash to stash in the bank, it’s hard to earn a great interest rate on all of it, with the highest APYs being capped at low maximum balances. Northpointe Bank takes a different tack, trading fancy account features in exchange for offering a great interest rate not just on low balances, but on high ones, as well, making it our winner for best savings account for kids with substantial savings.
Like some other contenders, Northpointe’s best rate of 1.50% APY is restricted to the first $1,000 in a youth savings account. But while other accounts drop to minuscule APYs after the threshold, Northpointe pays up to 1.12% APY on a balance between $1,001 and $9,999.99. Accounts with more than $10,000 earn an APY of 1.12% to 0.35%.
As a bank, Northpointe doesn’t require meeting membership eligibility requirements, so the process of opening an account is one step simpler. On the negative side, however, it offers no other youth accounts.
Final Verdict
For an account 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’ Savings Accounts
| Category & Winner | Age limits | Minimum balance | Interest rate | Special features |
|---|---|---|---|---|
| Capital One Best Overall | Up to age 18; checking available at 8 | $0 | 2.50% APY | Top-rated mobile app |
| USAlliance Financial Best for Young Children | Through age 12; checking available at 13 | $0 | 2% APY on first $500 | $10 annual birthday bonus through age 12 |
| Alliant Credit Union Best for Teens | Up to age 12; checking available at 13 | $100 to earn interest | 3.10% APY when you have $100 or more | Earn strong interest on whole balance. Also offers Excellent teen checking, with ATM fee refunds |
| Spectrum Credit Union Best for Maximum Interest | Up to age 21 | $0 | 7% APY on first $1,000 | Highest youth account APY |
| Northpointe Bank Best for Substantial Savers | Up to age 18 | $100 | 1.50% APY up to $1,000, 1.50% to 1.12% APY up to $9,999.99, 1.12%-0.35% for $10,000+ | Excellent blended interest rate for high balances |
In the News
In the News: When it comes to savings accounts, starting early can pay off. The National League of Cities reported that low- and moderate-income children that have savings accounts in their own names, even if their account balances are as low as $500, are much more likely to attend college and graduate with a degree.
Pros and Cons of Savings Accounts for Kids
No fees
Low minimums
Parental controls
Age limits apply
Higher APYs typically only on small balances
Other fees
Pros Explained
- 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 an account with as little 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 Explained
- 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.
- Other fees: Although kids' accounts may not have monthly maintenance fees, other fees may apply, such as ATM fees.
Although the Federal Reserve lifted its limit on savings account withdrawals, some banks still limit customers to six withdrawals per month. If your child makes more withdrawals than that, there may be excess withdrawal fees.
Alternatives to Savings Accounts for Kids
There may be times when your child needs access to bank accounts and services other than savings accounts. Depending on their needs, one of the following alternatives may be a better fit.
Debit Cards for Teens
For kids learning the fundamentals of managing 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. A checking account allows the teen to make withdrawals via check or debit card, and it doesn't limit how many withdrawals they can make 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.
When choosing a bank account for your child, make sure the bank is backed by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) so that your child's deposits are protected up to $250,000.
Custodial Accounts
If you want to save for a child's future, you can save 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 invest it; when the child reaches the age of majority for their state, they take ownership of the account. They can withdraw money to pay for college, buy a car, or purchase a first home.
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 tax-free.
Frequently Asked Questions
-
What Are Savings Accounts for Kids?
Kids or youth savings accounts are bank or credit union accounts available only to customers younger than 21, though they're sometimes capped at age 12 or 18. The best ones 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. A youth savings account for a child younger than 18 usually requires joint ownership with an adult, generally the child’s parent, grandparent, or guardian.
-
Do You Pay Taxes on Children’s Savings Accounts?
Whether or not your child needs to pay taxes on their savings account earnings depends on how much unearned income they’ve received during the year. Unearned income includes earnings such as bank interest and investment income, and any amount less than $2,300 is exempt from the regular income tax under the "Tax On A Child's Investment And Other Unearned Income” rule, more commonly known as the Kiddie Tax.
-
How Can I Open a Savings Account for My Child?
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. For accounts held at credit unions, you need to establish membership in the credit union. Since these are accounts for minor children, you (or another adult who will serve as the primary account holder) also will need to apply. After the account is open, you may need to set up the initial funding or link to one of your accounts at another institution as a separate step.
-
What Are the Benefits of Opening a Kids Savings Account?
A youth savings account can help create a learning opportunity for your child on money management, how to bank, and the importance of saving. Children learn the logistics of how to use a bank account, but they also begin to appreciate the value of seeing account balances grow, including from earned interest and other rewards. If you save for your child in a bank account in your own name, earnings on the account would be taxed at your adult taxpayer rate, diminishing the returns your child can earn on their savings.
-
What Is the Best Savings Account for Kids?
The best savings account for kids is the Capital One Kids Savings account. It pays interest on any balance amount, has no fees or balance requirements, and allows children up to age 18.
-
What Bank Has the Best Savings Accounts for Kids?
Capital One offers the best overall savings account for kids. There are no monthly or account maintenance fees, and there's no minimum balance required to open a new account. And Capital One allows kids to set up multiple accounts, so they can create an account for each of their savings goals.
Once the child turns 18, the account is automatically turned into a Capital One 360 Savings account. Like the kids' account option, a 360 Savings account has no monthly fees or account minimums.
Methodology
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.
:max_bytes(150000):strip_icc()/GettyImages-1363267262-46185a80ce6d4e51bc995f87c5a2e19e.jpg)
MoMo Productions / Getty Images
:max_bytes(150000):strip_icc()/04kate_sept2004-be216eb28c164b2482d1ab6172059633.jpg)
:max_bytes(150000):strip_icc()/TeenChecking_zamrznutitonovi-e158e3b1594f4cfc9054433871faf24b.jpg)
:max_bytes(150000):strip_icc()/_TeenDebit_DigitalVision-9864d49f6a5f44e9a39e91eb6da2fd8a.jpg)
:max_bytes(150000):strip_icc()/Primary-Image-capital-one-savings-account-interest-rates-may-2023-7497281-ebb7e37d5b02472d88c8d53d6f1fe427.jpg)
:max_bytes(150000):strip_icc()/DelmaineDonson-71bb15e61ebe4ba3a03cd237ad99a34f.jpg)
:max_bytes(150000):strip_icc()/CreditUnion_liulolo-c51dfd982c1149f8b6c91648b7729e3a.jpg)