What is the average interest rate for children's savings accounts?

Interest rates typically range from 0.5% to 2.5%, depending on the account and bank.

Are there fees for children's savings accounts?

Many accounts waive monthly fees, but some may charge around $5 to $10 if minimum balances aren't met.

Best Savings Accounts for Children: Compare Rates & Benefits

📋 This guide is for educational purposes only and not financial advice. Consult a licensed professional for your specific situation.

Setting up a savings account for your child isn't just about stashing money away, it's about teaching financial responsibility early on. With the right account, you can help your child learn the value of saving while benefiting from competitive interest rates and minimal fees. Let’s dive into the best options available and how to choose the right account for your needs.

Quick answer: To find the best savings account for your child, focus on accounts offering high interest rates, no monthly fees, and low minimum balance requirements. Top options include Capital One 360 Kids Savings (0.5% APY, $0 fees) and Alliant Credit Union Kids Savings (2.5% APY, $5 minimum deposit). Compare perks like financial education tools and parental controls to make the best choice for your family.

Why Open a Savings Account for Your Child?

Teaching kids about money management early can have lifelong benefits. A savings account gives them a hands-on way to understand concepts like interest, saving goals, and financial discipline. Here are three key reasons to consider opening one:

Financial education: Many banks offer tools and resources to help kids learn. Apps like Greenlight pair savings accounts with budgeting lessons.
Interest earnings: Accounts offering 2% or more annual percentage yield (APY) can grow their savings significantly over time.
Parental oversight: Most accounts allow parents to monitor transactions and set limits, ensuring responsible use.

According to a 2025 study by NerdWallet, 44% of parents reported that their children were more financially aware after using a savings account for six months. Start early, and you'll set the foundation for smart money habits.

What to Look For in a Kids' Savings Account

Not all accounts are created equal, and your choice should depend on your priorities. Here are three critical factors:

Interest Rate (APY): Aim for accounts offering at least 1% APY. Alliant Credit Union Kids Savings currently offers one of the highest rates at 2.5%.
Fees: Avoid accounts with monthly maintenance fees. Banks like Capital One waive fees entirely for kids' accounts.
Educational Features: Some banks provide budgeting apps or financial literacy programs to teach children about money.

Top Savings Accounts for Children

Here’s a comparison of some of the best options available today:

| Bank/Account Name | APY | Monthly Fee | Minimum Deposit | Best For | |-----------------------------|-----------|--------------|-----------------|-------------------------| | Capital One 360 Kids Savings | 0.5% | $0 | $0 | Easy online setup | | Alliant Kids Savings | 2.5% | $0 | $5 | High interest rates | | Chase First Banking | 0% | $0 | $0 | Parental controls | | Bank of America Minor Savings| 0.01% | $8 | $25 | Traditional banking |

Each account has its strengths. If you're looking for maximum growth, Alliant's 2.5% APY beats the competition. For solid parental controls, Chase First Banking is a great pick. However, avoid accounts with low APYs like Bank of America unless you need branch access.

How to Open a Savings Account for Your Child

Setting up an account is straightforward, but preparation matters. Here's a step-by-step guide:

Step 1: Choose the Right Account

Compare options using the table above. Decide what's most important, high interest rates, no fees, or special features.

Step 2: Gather Necessary Documents

You'll typically need your child’s birth certificate or Social Security number, plus your own ID.

Step 3: Visit or Apply Online

Many accounts, like Capital One 360 Kids Savings, offer online applications that take less than 10 minutes. For traditional banks, you may need to visit a branch.

Step 4: Fund the Account

Make the initial deposit, which can range from $0 to $25 depending on the bank.

Step 5: Teach Your Child

Help them create savings goals. Many apps linked to kids’ accounts allow goal tracking, making it fun and interactive.

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FAQ

What's the best savings account for a child in 2026?

The Alliant Kids Savings Account offers the highest APY at 2.5% with no monthly fees. It's ideal for growing savings quickly.

How much should I deposit into a child’s savings account?

Start small. Most experts recommend $25-$50 as an initial deposit to establish the habit without overwhelming your child.

Can children withdraw money from their savings accounts?

Yes, but parental controls often allow you to limit access. For example, Chase First Banking lets parents approve transactions.

Are credit unions better than banks for kids' savings accounts?

Often, yes. Credit unions like Alliant provide higher interest rates (up to 2.5% APY) and lower fees compared to traditional banks.

Do savings accounts teach children financial responsibility?

Absolutely. According to a 2024 Bankrate survey, 23% of parents noticed improved saving habits within three months of opening an account.

Last reviewed: 2026-07-27 by Editorial Team