Whether you want to have all the control or give your kids some room to manage their own money, you have plenty of great options for kids’ savings accounts.
Savings accounts for kids are generally divided into two categories: custodial accounts that parents manage for their kids until they’re adults and joint accounts that parents and their kids manage together. No matter which option you need, the best savings accounts for kids involve high interest rates, low fees and a trusted bank.
Our list of top kids’ savings accounts were hand-picked for their accessibility, few fees and ease. Each also has FDIC or NCUA federal insurance up to the typical amount of $250,000 for deposit accounts, and custodial brokerages are members of the Securities Investor Protection Corporation (SIPC).
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Chase Bank is the largest bank in the US by asset size and has millions of customers. It also has multiple kids' account options, including its checking account for kids called First Banking, which has no monthly fees. Additionally, J.P. Morgan also offers 529 plans, which are designed for parents to save money for their children's education expenses, and it offers custodial accounts, such as UTMA (Uniform Transfers to Minors Act) account options. Additionally, Chase has a large branch network for in-person support and various other products and services for the whole family. Just watch out for monthly fees on checking and low APYs on savings.
APY
N/A
Fee
$0 per month
Minimum deposit to open
$0
Chase Bank is the largest bank in the US by asset size and has millions of customers. It also has multiple kids' account options, including its checking account for kids called First Banking, which has no monthly fees. Additionally, J.P. Morgan also offers 529 plans, which are designed for parents to save money for their children's education expenses, and it offers custodial accounts, such as UTMA (Uniform Transfers to Minors Act) account options. Additionally, Chase has a large branch network for in-person support and various other products and services for the whole family. Just watch out for monthly fees on checking and low APYs on savings.
Pros
No monthly fee for kids' checking
Offers custodial accounts
529 plans for college savingsTrusted and established bank
Cons
Must be a Chase checking customer to apply for kids' checking
Greenlight offers up to five debit cards per plan and varying savings bonuses for each tier, ranging from 2% to 6% on up to $5,000 per family. Greenlight's app is also full of features, including chore and allowance tracking, instant transfers from parent to kids' wallets, educational content, identity theft protections, family location sharing, an investing platform and so much more. However, you can't avoid a monthly fee, which ranges from $5.99 to $24.98 per month.
APY
Up to6.00%
Minimum deposit to open
$0
Greenlight offers up to five debit cards per plan and varying savings bonuses for each tier, ranging from 2% to 6% on up to $5,000 per family. Greenlight's app is also full of features, including chore and allowance tracking, instant transfers from parent to kids' wallets, educational content, identity theft protections, family location sharing, an investing platform and so much more. However, you can't avoid a monthly fee, which ranges from $5.99 to $24.98 per month.
Discover avoids as many fees as possible, and the Discover® Online Savings Account comes with a high 3.60% APY on all balances. There are no monthly fees or minimum balance requirements, and there are no excessive withdrawal fees. You can call to make the Discover® Online Savings Account a custodial account, which gives you control until your child becomes an adult.
APY
3.60%
Fee
$0
Minimum deposit to open
$0
Discover avoids as many fees as possible, and the Discover® Online Savings Account comes with a high 3.60% APY on all balances. There are no monthly fees or minimum balance requirements, and there are no excessive withdrawal fees. You can call to make the Discover® Online Savings Account a custodial account, which gives you control until your child becomes an adult.
Alliant Kids Savings Account earned a spot on our Finder Awards for 2022, earning a competitive 3.1% APY for balances of $100 or more. It's for kids 12 and younger and offers a $5 deposit paid by Alliant to get the account started. The account comes with an ATM card that your kid can use to withdraw money from over 80,000 fee-free ATMs. Also, Alliant offers the Alliant Teen Checking account, which you can open at age 13 to 17, transitioning from the '12 and under' savings. However, you must become an Alliant credit union member (nationwide availability), and the savings account has a $1 monthly fee, which can be waived if you opt in to estatements.
APY
3.10%
Fee
$1 per month (can be waived)
Minimum deposit to open
$5
Alliant Kids Savings Account earned a spot on our Finder Awards for 2022, earning a competitive 3.1% APY for balances of $100 or more. It's for kids 12 and younger and offers a $5 deposit paid by Alliant to get the account started. The account comes with an ATM card that your kid can use to withdraw money from over 80,000 fee-free ATMs. Also, Alliant offers the Alliant Teen Checking account, which you can open at age 13 to 17, transitioning from the '12 and under' savings. However, you must become an Alliant credit union member (nationwide availability), and the savings account has a $1 monthly fee, which can be waived if you opt in to estatements.
Charles Schwab is a renowned bank, well-known for investing and saving. The Schwab One Custodial Account is a brokerage account that's designed for parents or guardians to gift their children when they reach the age of majority. It has a $0 minimum deposit, no monthly fees and no commission fees for standard online stock and exchange-traded fund (ETF) trades. All assets are in the child's name, and any funds used before the age of majority must be used for the child's benefit. Some other great perks with this account include no contribution limits, 24/7 customer support and access to investment research and tools.
Stock trade fee
$0
Minimum deposit
$0
Charles Schwab is a renowned bank, well-known for investing and saving. The Schwab One Custodial Account is a brokerage account that's designed for parents or guardians to gift their children when they reach the age of majority. It has a $0 minimum deposit, no monthly fees and no commission fees for standard online stock and exchange-traded fund (ETF) trades. All assets are in the child's name, and any funds used before the age of majority must be used for the child's benefit. Some other great perks with this account include no contribution limits, 24/7 customer support and access to investment research and tools.
Pros
$0 monthly fee and opening deposit
No contribution limits
No commission fees for standard online stocks and ETFs
Methodology: How we choose the best kids’ savings accounts
Finder’s banking experts research over 120 kids’ savings accounts to curate a list of the best. Accounts listed must meet this criteria at a minimum:
Allows joint or custodial account options
FDIC or SPIC insurance
Low monthly fees or easily avoidable
APYs above
0.38%
Available in all 50 states
Allows online applications
What makes a good kids’ savings account?
A good kids’ savings account is one that’s designed for your needs, but it’s also one that’s affordable, easy to open and earns a high rate. Compare these factors before opening a kids’ savings account:
Affordable. The point of saving is to tuck away as much money as you can afford, and no one wants to pay costly monthly fees that eat away at your savings. Stick to accounts that fit within your budget.
Protection. A legitimate bank or credit union will have deposit insurance automatically included with its deposit accounts. For brokerage accounts, verify they have SIPC coverage.
High APYs. The average rate for a savings account is
0.38%, but you can find higher rates than that. Compare high-yield savings accounts with custodial options, or just keep that average rate in mind when comparing kids’ accounts.
Age requirements. Many kids’ savings accounts have age requirements, such as Alliant’s savings account being for ages 12 and under or 13 and up for its teen checking.
Custodial vs. joint kids’ savings accounts
A custodial account is a savings or investment account that an adult opens and manages on behalf of a child. Custodial accounts are under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA), depending on the state. The child is the legal owner of the account, and once they reach the age of majority (legally considered an adult), they can gain access to the funds. Any funds used before the child becomes an adult must be used for the child.
A joint bank account is co-owned by two or more people, and in this case, a parent and a child. Both owners have access to the account, and there’s no automatic “handover” of the account’s funds or full ownership at a certain age.
Custodial accounts are best for:
Saving for large goals, such as a college education or an inheritance
Small children not ready for their own bank account
Joint bank accounts are best for:
Teaching a child how to manage funds with parental supervision
Earning interest on everyday savings
What is the best age to open a savings account for a child?
You can start a savings account for your kid soon after their birth, especially if you want to focus on large goals and long-term savings. The sooner you can start saving, the more money you can give them for educational expenses, their first car, wedding and so on.
For kids’ checking, it’s common for parents to open those once their kids are in their teens and ready for the responsibility of a debit card. Most banks and credit unions offer kids’ checking for ages 12 to 17.
Choosing a kids’ bank account based on age
Since kids can’t open bank accounts on their own, parents and guardians will have to help open and maintain the accounts until the child becomes an adult. If you’re looking to open an account for or with your child, consider these types based on age:
Babies & toddlers. Custodial accounts or UGMA/UTMAs to save for them while they’re young.
Ages 6 to 12. At this age, kids may have an allowance and want to spend their money. You may want a savings account with an ATM card so you can withdraw cash, or a kids’ debit card with chore and allowance features that still have heavy parental controls.
Teens 13 to 17. Once your kid is a teen, they may have an allowance, a part-time job and the desire to learn how to manage their own cash. There are many student debit cards on the market, and options like the Step card that accept direct deposit for wages, a debit card, credit-building and educational features.
Yes, there can be tax implications for kids’ bank accounts. But because children generally fall into a lower tax bracket than their parents, opening a custodial account in your child’s name reduces the percentage of your savings that goes to Uncle Sam.
Keep these tax implications in mind when comparing bank accounts for your child.
Interest earnings from savings accounts can be subject to federal income tax. UTMA and UTMA accounts are also taxable investment accounts, and how much you pay in taxes depends on the tax bracket.
The kiddie tax is designed to discourage parents from shifting investments to their children to avoid paying taxes. It applies to all children under the age of 18 or students under the age of 23 whose unearned income — including interest, investments and gifts — exceeds $2,100. The first $1,050 is tax-free, whereas the second $1,050 is taxed at the child’s rate of just 10%. Any amount of unearned income above $2,100 is taxed at the same rate as income in a trust.
With the gift tax, individuals can give up to $15,000 per year or $30,000 for married couples without gift tax implications. For amounts above this limit, a gift tax return must be filed. However, every individual has a lifetime estate and gift tax exemption amount of $5.6 million, or $11.2 million for married couples. So, even if you exceed the annual gift limit, you may not owe any taxes.
Be sure to talk with a tax professional or financial advisor to aid in your decision and offer specifics for your situation.
Bottom line
The best kids’ savings accounts earn high rates and teach kids how to set goals and manage their money, but also come with perks like no fees or minimum balances.
A savings account empowers kids to save, but if you want your child to learn how to spend and save safely, consider other kids’ accounts, such as a checking account or prepaid card.
Frequently asked questions
Are there tax-free kids’ savings accounts?
There are some tax-advantaged accounts, such as 529 savings plans, where contributions are after-tax dollars and funds used for college expenses are tax-free. Earnings from 529 plans are not subject to federal tax or generally state tax when used for qualified education expenses such as tuition, fees, books or housing, according to the IRS.
Is there a free bank account for a child?
Yes, there are plenty of no-fee kids’ bank accounts, including Chase First Banking, Modak Makers, Capital One Money and the Fidelity Youth Account.
Which is better: Greenlight or GoHenry?
Greenlight and GoHenry (now Acorns Early) are two of the top kids’ banking options. However, Greenlight has more extra features overall and is a better option for parents with multiple children. Read more about Greenlight vs. GoHenry (now Acorns Early).
Bethany Hickey is the banking editor and personal finance expert at Finder, specializing in banking, lending, insurance, and crypto.
Bethany’s expertise in personal finance has garnered recognition from esteemed media outlets, such as Nasdaq, MSN, Yahoo Finance, GOBankingRates, SuperMoney, AOL and Newsweek. Her articles offer practical financial strategies to Americans, empowering them to make decisions that meet their financial goals. Her past work includes articles on generational spending and saving habits, lending, budgeting and managing debt.
Before joining Finder, she was a content manager where she wrote hundreds of articles and news pieces on auto financing and credit repair for CarsDirect, Auto Credit Express and The Car Connection, among others.
Bethany holds a BA in English from the University of Michigan-Flint, and was poetry editor for the university’s Qua Literary and Fine Arts Magazine. See full bio
Bethany's expertise
Bethany has written 458 Finder guides across topics including:
Compare top credit cards for teens and how they work when you’re a minor.
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