Our pick to save money for your baby: CIT Bank Term CDs
- 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.
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.
When choosing a new account, compare:
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.
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.
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.
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:
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.
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.
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