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Compare savings accounts for your baby

Start saving early so your money can build interest in a bank account.

Use this table to compare bank accounts for your baby. Sort each column by name, APY, fees and minimum opening deposits. You can also compare accounts against each other by checking the Compare box below each provider or using the filters to condense your search options.

Name Product Annual percentage yield (APY) Fee Minimum deposit to open
Alliant Kids Savings Account
Finder Rating: 4.6 / 5: ★★★★★
Alliant Kids Savings Account
0.55%
$1 per month
(can be waived)
$5
This Kids Savings Account has no maintenance fees with e-statements and a high APY with a minimum daily balance of $100.
Capital One Kids Savings Account
Finder Rating: 4.7 / 5: ★★★★★
Capital One Kids Savings Account
0.30%
$0
$0
Kids Savings Accounts are fee-free and don’t require a minimum balance.
BECU Early Saver Youth Account
Finder Rating: 4.7 / 5: ★★★★★
BECU Early Saver Youth Account

2.02% on $0 to $500
0.02% on $500.01+
$0
$0
Offers your child a premium interest rate on the first $500 in deposits.
Justice Federal Credit Union Young Savers
Finder Rating: 4 / 5: ★★★★★
Justice Federal Credit Union Young Savers

0.20% on $20,000+
0.15% on $5 to $19,999
$0
$5
Justice Federal designed the Young Savers Account especially for children to start saving money early and to learn money management skills.
Bank of America Minor Savings Account
Finder Rating: 3.6 / 5: ★★★★★
Bank of America Minor Savings Account
0.01%
$0
$25
Help a child build a savings account and learn about banking.
Golden 1 Youth Savings Account
Finder Rating: 4 / 5: ★★★★★
Golden 1 Youth Savings Account
0.05%
$0
$1
This account allows members under the age of 18 the ability to make withdrawals and deposits and experience managing their own money, all while earning dividends.
PNC 'S' Is For Savings
Finder Rating: 3.6 / 5: ★★★★★
PNC 'S' Is For Savings
0.01%
$5 per month
(can be waived)
$25
PNC's 'S' is for Savings account helps young children learn financial basics through an interactive, online experience with tips from Sesame Street
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Compare up to 4 providers

We compare the following prepaid cards for kids & teens

How do I choose the best savings account for a baby?

When choosing a new account, compare:

  • Requirements for opening the account. This includes minimum deposit amounts and any necessary information, like a social security number or birth certificate.
  • Ongoing fees. Some accounts will charge ongoing monthly or yearly fees, though you may be able to waive them by meeting depository requirements or maintaining a minimum monthly balance.
  • The interest rate. Look at both the interest rate and how often it compounds. While credit unions and online banks tend to offer better interest rates than mainstream banks, it’s not always the case.
  • Location of branches. The proximity of a branch to where you live is important when opening a bank account for a child. While online banking might be perfect for adults, banks give children limited access to these platforms. As your child grows older, visiting a branch to make deposits and withdrawals will enter the picture.
  • Account type. Some accounts will let the child withdraw money as they grow up, while others won’t allow withdrawals until they’re an adult.

What type of bank account should I open for my baby?

Parents have a few different options when it comes to opening a bank account for their babies. Picking the account that’s right for you boils down to one question: When do you want your child to have access to funds in the account?

Joint savings accounts

If you want your child to have unrestricted access to money in the account, a joint savings account is your best option. Many banks and credit unions offer joint savings accounts specifically for children and their parents or guardians. You can open an account in your baby’s name, provided you and your baby meet some basic eligibility criteria. Typically, your child is listed as the primary account holder while you assume the role of the co-owner. Some institutions may require you to be present if your child wants to deposit or withdraw funds, but others don’t. Also, some banks will only let you open a savings account for your baby by visiting a branch, while others will let you open the account online, via email or over the phone. A typical baby account earns interest and doesn’t have any ongoing fees. However, these accounts may have some depository requirements along with restrictions on withdrawals.

Custodial accounts

If you don’t want your child to have access to their savings until they reach adulthood, you’ll want to open a custodial account for your baby. Custodial accounts come in two flavors: Universal Transfer to Minors Act (UTMA) accounts and Universal Gift to Minors Act (UGMA) accounts. The most significant difference between these options is that UGMA accounts can exclusively hold financial assets, such as cash, stocks and bonds, while UTMA accounts let you transfer other assets such as vehicles, real estate and jewelry. In either case, you’ll have sole access to the account until your child reaches the age of majority in your state.

There are a couple of other considerations to keep in mind before opening a custodial account.

  • Tax implications. Because custodial accounts would be in your child’s name, they would fall into a lower tax bracket. This means your child would pay less income tax than if you kept the assets under your name.
  • Financial aid. Custodial accounts may reduce your child’s chances of receiving financial aid for their secondary education. This is because the funds in the account are considered the student’s assets.

529 Plans

If you exclusively want to use your child’s savings to pay for their education, a 529 Plan is an excellent option. This type of account includes special tax incentives and financial aid benefits when the funds are used to pay for your kid’s education. There are two types of 529 Plans, college savings plans and prepaid tuition plans. You can open a 529 Plan in any state, not just the state you live in. But keep in mind that specific features and benefits may vary from state to state.

High-yield savings accounts

If you don’t want your child to have access to saved funds until you permit it, you could open a high-yield savings account in your name and earmark the funds for your young one. That way, the money would be in your name until you decide to transfer it to your child. Savings accounts for adults often have better interest rates than accounts for kids, but there are other factors to consider, such as tax implications.

How can I open a bank account for my baby?

Different financial institutions have different processes when it comes to opening bank accounts for babies. In some cases, you’ll need to visit a branch with your child, but in other cases, you can do everything online. But generally, banks and credit unions follow the same steps.

  1. Request an application to open a joint account.
  2. Add your child’s name, address and Social Security number as the primary account holder.
  3. Add your name, address, phone number, email address and Social Security number as the joint or secondary account holder.
  4. Fund the account with cash, a credit card or a different bank account.

Eligibility

To open a bank account for your baby, you’ll need to meet the following eligibility requirements.

  • At least 18 years old
  • US resident

Required information

Be prepared to provide the following details when opening your baby’s bank account.

  • Your and your baby’s name
  • Your and your baby’s Social Security numbers
  • Address
  • Contact information
  • Driver’s license or government-issued ID
  • Some banks may require your baby’s birth certificate

Case study: Can I open an account before he or she is born?

No. You’ll need to provide a Social Security number and/or birth certificate, which means you can’t open an account for an unborn baby. But some banks will let you open an account in your name and add the baby’s name after they’re born. You can also open a standard savings account in your own name and transfer the saved funds to a joint account in your child’s name once you’ve received their Social Security number.

How to save for a baby

Baby savings accounts vs adult savings accounts

Instead of opening a bank account for your baby, you may consider using your existing savings account and earmarking money for your little one. There’s nothing wrong with this, especially if you earn a solid APY. But some savings account for kids, including the one offered by Northpointe Bank, have better interest rates than most high-yield savings accounts for adults. In any case, once your child has developed an understanding and appreciation for the value of dollar, giving them their own savings account can put their financial literacy on the fast track.

Alternatives to baby savings accounts

Traditional savings accounts let your child add and withdraw funds before they’re 18. While this can be a great way to teach kids to save up for special purchases, there are several alternatives to consider:

  • Custodial (UGMA or UTMA) accounts. With a custodial account, the child won’t be able to withdraw the funds until they’re at the age of majority — 18 or 21 in most states. This is a great way to help them start off adult life with a financial boost.
  • CDs.Certificates of deposit can be gifted to a child if you list yourself as the account custodian. They tend to earn higher interest rates than savings accounts, and the guaranteed rate means you’ll know exactly how much your gift will be worth when it matures. They’ll need to wait until they’re the age of majority before they can access the funds.
  • College savings accounts. Also known as a 529 plan, these plans are sponsored by states, state agencies and educational institutions and let you set aside money for the child’s future education. There are two different types:
    • Prepaid tuition plans. This account lets you purchase credits at participating universities that your child can use when they go to college. But if they decide to go to a different college, you could see a much smaller return on your investment.
    • Education savings plans. This account lets you save for any college expense, including tuition, room and board and fees. It can be used at almost any US college, and some international schools, making it the more flexible option.

Read up on the requirements of opening a kids bank account

What to watch out for

Keep these potential drawbacks in mind before opening a savings account for your baby.

  • Your kid could drain the account. In many cases, your child may be able to withdraw all of the funds in the account without your permission.
  • Limited access. Some savings accounts come with ATM cards you or your kid can use to access your money, but some banks require you to visit a branch to withdraw funds.
  • Taxes consequences. If your child earns more than $2,100 a year in interest, they may have to pay taxes. But if that’s their only income and it totals less than $10,500, it can be included on a parent’s tax return. If your child is earning more than $10,500 a year in interest, you’ll need to file a tax return in their name.

Bottom line

Starting a savings account early lets your money accrue interest as a child grows up. Whether you want to open a savings account, custodial account, CD or college savings plan depends on your savings goals and the amount of access you want the child to have.

No matter which option you choose, compare financial institutions to make sure you’re getting the account that will offer the most growth.

Frequently asked questions

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