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Opening up a kids bank account

Your guide to encouraging saving and financial management

“Opening a bank account for your kids not only helps with building savings for when they’re old enough to use them, but can go a long way to helping them establish good money habits that continue well into their adult life.”

Opening a kids bank account is the perfect way to start your child’s journey to financial success. However, it can be overwhelming trying to understand the details of whose name the account should be in, who can access the funds in the account and what happens when your child turns the age of majority in your province. Before you take your son or daughter to your local bank branch to sign up for an account, make sure you know the ins and outs of managing a children’s bank account.

What is a kids bank account?

A kids bank accounts usually act both as a chequing and savings account at the same time. An interest rate is set to encourage saving and a debit card is provided for spending and transactions. One defining feature of a kids bank account is that it typically has no monthly account maintenance fees and almost all come with no opening deposit minimums. This makes opening a bank account for your child an attractive way to help them build their savings.

There are 3 general types of kids bank accounts you could open for your little one:

1. Registered Education Savings Plans (RESPs)

These types of accounts are set up to save for your child’s future education. The funds from these accounts are to be used solely for educational purposes. These accounts can stay open for up to 36 years and anyone can open an account for a child. You don’t need a regular bank account to open a RESP. If applicable, government educational grants can also be paid into the RESP. The number one perk of these savings accounts is that the earnings from the investment grow tax-free while it is in the RESP, but it will be taxed when the funds are withdrawn.

2. Joint chequing and saving accounts

These accounts are opened up jointly by a minor and an adult — or parent and child. They both have access to the funds in the account, and the money is owned jointly until otherwise specified. With many of these accounts, banks allow parents to put withdrawal limits on the account and track their child’s spending habits to teach them responsible money habits. These accounts act as both a regular chequing account and a savings account allowing the child to spend and earn interest. Depending on the institution, the parent’s and child’s roles may vary. The child could be the owner of the account while the parent still has access to the statements and still retains signing authority.

3. Interest-earning savings accounts

These accounts allow kids to learn the importance of saving money and financial responsibility from an early age. Many don’t have minimum opening deposits, and even more have zero monthly maintenance fees, which means your children’s money will earn interest even faster.

Tax implications of opening a children’s bank account

Look at some popular kids savings accounts out there and compare the current interest rates, features and the conditions that apply.

AccountInterest rateFeatures and conditions that apply
Tangerine Children’s Savings Account0.2% (one of the highest offered)
  • Kids 16 and under.
  • Parent or guardian must have an account with Tangerine to apply.
  • There is a $0 fee per month.
  • Regular transactions are free and unlimited.
  • Manage account online or through a banking app.
CIBC Advantage for Youth0.05%
  • Kids 18 and under.
  • Free SPC (student rewards program) membership.
  • Regular transactions are free and unlimited.
  • $0 fee per month.
  • Manage account online or through banking app.
Scotiabank Getting There Savings Account0.05% on balances up to $499.99, and 0.1% on balances after
  • Kids 18 and under.
  • Can earn SCENE rewards.
  • Regular transactions are free and unlimited.
  • $0 fee per month.
  • Receive an email, text or in app push notification through Scotia InfoAlerts when important account activity happens.
TD Youth AccountTiered interest rate starting at 0.01%
  • Kids 18 and under.
  • $0 fee per month.
  • Regular transactions are free and unlimited.
  • Automatic savings plan.
  • Manage account online or through banking app.
RBC Leo’s Young Savers Account0.01%
  • Kids 12 and under.
  • $0 fee per month.
  • Limit of 15 free debits per month.

Read up on how to compare bank accounts for your baby

Children’s financial education

The government of Canada has many resources available to help teach your child about money, debt, savings and budgeting. Check out these resources here. You can also speak to your bank about programs that exist that are designed to educate and engage your child in money-related topics.

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