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Compare savings accounts for your baby

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

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Fact checked

Our pick to save money for your baby: CIT Bank Term CDs

CIT Bank Term CDs logo

0.35%

6-month APY

  • No maintenance fees
  • $1,000 minimum to open
  • Daily compounding interest
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Opening a savings account for your baby is a good idea on many fronts. It can provide an easy way to save towards university expenses, offer bonus interest and help to teach your child about saving early in life. However, not all savings accounts for babies are the same, so it pays to shop around.

Compare savings accounts for your baby

Use this table to compare bank accounts for your baby. Use the tabs to jump between savings accounts and CDs. Then, sort each column by APY, minimum deposit and more until you find an account that’s right for you.

$
$
months
Name Product Interest rates (APY) Fee Minimum deposit to open Interest earned More info
Alliant Kids Savings Account
0.65%
$0
$5
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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
0.50%
$0
$0
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Kids Savings Accounts are fee-free and don’t require a minimum balance.
BECU Early Saver Youth Account

4.07% on $0 to $500
0.02% on $500.01+
$0
$0
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Offers your child a premium interest rate on the first $500 in deposits.
Justice Federal Credit Union Young Savers

0.20% on $20,000+
0.15% on $5 to $19,999
$0
$5
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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
0.01%
$0
$25
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View details
Help a child build a savings account and learn about banking.
Golden 1 Youth Savings Account
0.10%
$0
$1
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View details
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
0.01%
$5 per month
(can be waived)
$25
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View details
PNC's 'S' is for Savings account helps young children learn financial basics through an interactive, online experience with tips from Sesame Street
Citizens Bank College Saver
Citizens Bank College Saver
0.05%
$0
$25
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View details
A rewarding college savings plan that can make higher education more affordable.
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Name Product 1-year APY 18-month APY 2-year APY 3-year APY 5-year APY
CIT Bank Term CDs
0.35%
0.35%
0.4%
0.4%
0.5%
Discover CDs
0.6%
0.6%
0.65%
0.7%
0.8%
Radius Bank CDs
0.5%
0.5%
0.5%
0.5%
0.5%
Discover IRA CDs
0.6%
0.6%
0.65%
0.7%
0.8%
BBVA CD
0.15%
0.15%
0.2%
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Compare up to 4 providers

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 is a bank account for a baby?

Some banks and credit unions provide accounts especially for children. You can open an account in your baby’s name, provided you and your baby meet some basic eligibility criteria.

A typical baby account provides interest and won’t charge ongoing fees. However, they may come with some depository requirements along with restrictions on withdrawals.

How do I open a bank account for a newborn?

You’ll need to list both your name and the child’s name on the account, but some accounts will let you sign full ownership of the account over when the child is legally an adult — 18 in most states. You can open an account online or at a bank branch, and you’ll need to provide personal information for yourself and the baby. This can include social security numbers, an address and phone number and a picture ID or 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 after they’re born.

How to save for a baby

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.

Are there any government regulations or taxes?

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.

Read up on the requirements of opening a kids bank account

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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