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5 best savings accounts for kids for 2021

Set your little ones up for financial success with one of these best kids bank accounts.

Updated . What changed?

Fact checked

The best savings account for kids has a high APY and the tools and resources you need to set them up for financial success. We researched over 120 savings accounts and looked at interest rates, fees, deposit requirements and financial literacy tools to curate a list of five best kids bank accounts, so that you can find the best one for your kid.

What’s changed in 2021?
We reviewed our list and these are still the best savings accounts for kids for 2021. We added information about the APY, minimum balance requirements, monthly fees and pros and cons for each account, so you can quickly compare details for each. The Northpointe Bank Kids Savings Account was originally on our page, but we removed it because the details of the account are unclear.

Closer look at the best savings accounts for kids

Most children’s savings accounts can help your child start saving for the future. But some accounts are better than others. Here’s our top five picks:

Best online savings account for kids

Capital One Kids Savings Account

Min. opening deposit
Capital One strives to provide a hands-on approach to saving through its mobile app and customer service. Representatives and learning resources can help your child set goals and monitor progress from home or while you're on the go.
  • No fees or minimum balance requirements. Enjoy minimal fees and no minimum balance requirement to earn interest.
  • No minimum deposit. Open this account with as little as $1 or as much as $10,000.
  • Top-rated mobile app. Track the progress of your saving with Capital One's mobile banking app that comes with parental controls.
  • Automatic savings plans and goals. Make regular deposits or send your child's allowance on a schedule.
  • Linked to personal checking account. You'll need to link the Capital One Kids Savings Account to your personal checking account, which is how you'll make deposits going forward.
  • Four-day hold on deposits. If you deposit a check or make a transfer from another bank, you may not have access to the funds for four business days.
Interest compounding Monthly
Minimum to earn interest $0
Monthly transaction limit 6
Fee per transaction over limit $10

Best savings account for kids

Alliant Kids Savings Account

Min. opening deposit
The Alliant Kids Savings Account offers an easy way to keep track of your funds with an efficient online platform and mobile app. If you can stick with the program for the long run, this account can earn an impressive amount of interest over time.
  • High interest rate. With an APY of 0.55%, Alliant boasts that this rate is 8x higher than most banks.
  • Low minimum deposit. Although the account requires a minimum $5 deposit, Alliant pays it for you.
  • No monthly fees. Sign up for eStatements to waive the monthly maintenance fees.
  • Mobile app available. Helps you easily track progress toward your savings goals, deposit checks and more.
  • Free Alliant Convenience Card. Easily make deposits through an ATM.
  • Option to open a Teen Checking account at age 13. This account comes with a debit card that links to the savings account, allowing for easy transfers between accounts.
  • Minimum balance requirement. A minimum daily balance of $100 or more is required to earn monthly dividends.
  • Eligibility requirements for parents. You must meet eligibility requirements for Alliant membership in order to open this account for your child, which includes working at a particular organization, living in a qualifying community or supporting a partner charity.
  • Potential fees. Several fees may apply, including a 12-month inactivity fee of $10.
Interest compounding Monthly
Minimum to earn interest $100
Monthly transaction limit
Fee per transaction over limit

Best long-term savings account for kids

Justice Federal Credit Union Young Savers

Up to 0.2%
Min. opening deposit
This account from Justice Federal Credit Union helps your child save early and develop good money management habits. It automatically converts to a regular savings account on your child's 18th birthday. But you can't open online.
  • Earns interest.You'll earn 0.15% APY on balances up to $19,999 and 0.2% on balances of $20,000 or more.
  • Low opening deposit.Give your child a jump start on their savings with as little as $5.
  • No monthly fees.You won't pay any maintenance fees for this account.
  • Can't open online.You must visit a local Justice Federal Credit Union branch or call 800-550-5328 to open this account.
  • Membership requirements.This credit union primarily serves the justice, homeland security and law enforcement communities and their loved ones, so you may not qualify for an account.
Interest compounding Monthly
Minimum to earn interest $0
Monthly transaction limit
Fee per transaction over limit $5

Best educational savings account for kids

PNC 'S' Is For Savings

Min. opening deposit
This savings account is designed to help your kid learn basic money concepts such as saving, sharing and spending through an interactive online banking experience. Each account comes with an optional ATM card. But the interest rate is low.
  • Educational programs. Your kid learns basic financial skills from Sesame Street and can play interactive activities to practice saving, sharing and spending.
  • Auto Savings feature. Set specific savings goals for your kid and work with them to monitor and track their progress over time.
  • Avoidable monthly fee. The $5 monthly fee is waived for anyone under age 18.
  • Low APY. This account earns a low 0.01% APY, but its educational programs may make up for it depending on your priorities.
Interest compounding Daily
Minimum to earn interest $1
Monthly transaction limit
Fee per transaction over limit

Best introductory savings account for kids

BECU Early Saver Youth Account

Up to 2.02%
Min. opening deposit
Boeing Employee Credit Union (BECU) primarily services those who work and live in Washington state or a few select counties in Oregon and Idaho. This account earns a high APY on your kid's first $500 in savings. But the rate drops after that.
  • Jump start on savings. Your kid can watch their savings stack up as they earn 2.02% on their first $500.
  • Free ATM card. This account comes with an ATM card for convenient cash withdrawals.
  • No fees or deposit requirements. Open this account with as little as $0 and and no monthly service fees.
  • Cap on APY. After your kid saves their first $500, the interest rate drops to 0.02%. This is on par with the national average, but other institutions offer stronger rates.
  • Membership requirements. BECU memberships are open to those who live or work in Washington state or a few select counties in Oregon and Idaho and Boeing employees.
  • Can't open online. You'll need to visit a local BECU branch or mail in your application to open this account.
Interest compounding Quarterly
Minimum to earn interest $0
Monthly transaction limit
Fee per transaction over limit $20

How to find the best savings account for my kid

When shopping around for the best savings account for your kid, look for these features:
  • Interest rate. You may want to shop around for accounts with higher interest rates before making a decision. Some banks also offer promotional rates and other incentives, so it’s worth seeing what’s out there.
  • Deposit methods. Check to see if your child has a school banking program in place, which would allow your child to make deposits while at school. If not, you can always open an account for your child and take them to the bank once a month to show them how to physically deposit their pocket money.
  • Monthly fees. There may not be any account maintenance fees for a kids’ savings account, but you should pay attention to any monthly withdrawal limits or fees.
  • Minimum opening deposit. Some kids’ savings accounts come with a minimum opening deposit — usually around $25 — so compare your options if you’re looking for an account that doesn’t have this requirement.
  • Special educational programs. Some banks have programs that give children access to online educational portals, and some even provide rewards such as a $5 starter deposit and stationery to help children learn about saving and finances.

Kids savings account alternatives

Since minors can’t legally sign contracts, they won’t be able to open a savings account under their own name. This leaves three options: a joint account, a prepaid card for kids or a custodial savings account. Here’s how they differ:
  • Joint savings accounts. You can open a regular savings account jointly with a minor. Some banks may prevent children under the age of 13 from making withdrawals without the co-owner’s signature, but others may give you equal access to the account.
  • Prepaid cards for kids. Also known as kids debit cards, these accounts come with a mobile app and prepaid card that let you assign and track chores, control your child’s spending, and give them a safe space to learn how to save, spend, give and invest.
  • Custodial savings accounts. Money in a custodial account belongs to the minor, but they can’t access it until they reach the age of majority — 18 in most states. An adult serves as the custodian and oversees the account until the child comes of age.

Compare debit cards and savings accounts for kids

Use the table to compare kids savings account and debit cards. If you spot multiple accounts, click the “Compare” box to explore them further.

Name Product Annual or monthly fee ATM withdrawal Features
$4.99 per month
  • Allowance payouts
  • Usage notifications
  • Flexible parental control
  • Parent-paid interest
  • Educational investment option
Greenlight is the prepaid debit card for kids that parents manage from their phones with flexible parental controls.
$1.67 per month ($19.99 annually) includes free card; $0.67 per month ($7.99 annually) for additional cards
  • Competitive fee
  • Flexible paydays
  • Savings match feature
The BusyKid Visa® Prepaid Spend Card gives your kids the freedom to spend anywhere Visa® is accepted, and parents see every transaction made.
$5.99 per month
  • Free trial
  • Real-time requests
  • Parent-paid interest
Teach your children good money habits with this comprehensive prepaid card and account.
$3.99 per month
  • Free trial
  • Custom tasks
  • Spending limits
Teach your kids to save with a reloadable card you control, but you pay $3.99 a month.
$0 per month
  • Automatic reloads
  • Send money instantly
  • Create up to five subcards
Get up to five debit cards that you control from your main account — but it will come at a cost

Compare up to 4 providers

Name Product Interest rates (APY) Fee Minimum deposit to open Interest earned
Alliant Kids Savings Account
Finder Rating: 4.6 / 5: ★★★★★
Alliant Kids Savings Account
$1 per month
(can be waived)
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
Kids Savings Accounts are fee-free and don’t require a minimum balance.

Compare up to 4 providers

Plan out your goals with our savings calculator

How does a savings account work for my child or grandchild?

Kids’ savings accounts usually have higher interest rates than adult savings accounts and savings bonds, but they may have more withdrawal restrictions depending on the type of account. Age restrictions also apply, and to be eligible, you usually need to be under the age of 18.

Making deposits into children’s savings accounts

The type of savings account you open can affect the way deposits are made. Depending on the purpose of the savings account, there are a few options you may want to explore:

  • Joint accounts. Joint accounts operate just like any standard savings account. Either owner will be able to make deposits into the account, and either party will be able to withdraw, although there may be restrictions depending on the age of the minor.
  • Uniform Transfers to Minors Act (UTMA) accounts. A UTMA account is a type of custodial savings account that is owned by the minor but managed by the custodian. This allows the custodian to make irrevocable deposits of nearly any type of asset into the account.
  • Uniform Gift to Minors Act (UGMA) accounts. A UGMA account is another type of custodial account that is very similar to a UTMA account but only allows custodians to make deposits in the form of bank deposits, stocks, bonds, mutual funds, other securities and insurance policies.

Tax implications of children’s savings accounts

Children’s savings accounts are a great way to teach kids about the importance of saving and can help them work toward short- and long-term financial goals. While there are a number of ways you can make deposits, children’s savings accounts are not a way to avoid paying taxes. Tax rates and rules can differ between states, banks and accounts, so check with your institution to ensure you’re wholly informed.

Kiddie tax

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 will be taxed at the child’s rate of just 10%. Any amount of unearned income above $2,100 will be taxed at the same rate as income in a trust.

Gift tax

Individuals can gift 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. This means that even if you exceed the annual gift limit, you may not owe any taxes.

Are there any traps to avoid?

Parents won’t have to worry about their child losing money with a savings account, as deposits of $250,000 or less are guaranteed if the bank is FDIC-insured. However, you should consider other risks that may come from managing a child’s savings account. For example, if you want to save your own money in your child’s savings account, even if it’s intended to purchase something for your child, there may be tax implications.

  • These accounts are designed for your child only. Parents shouldn’t try to use children’s savings accounts to avoid taxes. The IRS has very strict rules governing the funds that are being held in a child’s savings account.
  • Your kid has access to withdraw funds. As your child grows and is given more access to the account, they could fall into the habit of making frequent withdrawals from it. If you believe this may be an issue for your child, look for an account that limits access.
  • Introductory interest rates don’t last forever. The introductory interest rate may look good, but it’s likely going to revert to an average rate after a period of time. Be sure to read the terms and conditions closely before you commit to a product.

Requirements for popular kids’ savings accounts

Each bank sets their own rules and requirements when it comes to savings accounts for kids. This table breaks down the age limits, eligibility requirements and more for popular kids’ savings accounts, so you can know what to expect.

JFCUAlliantNorthpointeCapital One
Age limitUnder 18Under 13Under 18Under 18
What happens to the account at the age limit?Automatically converts to Student Rewards Checking AccountOption to open Teen Checking AccountNot stated on websiteNot stated on website
Signatory requirementsParent, guardian or other adult with verified identityParent, guardian or other adult with verified identityParent, guardian or other adult with verified identityParent, guardian or other adult with verified identity
Who can make transactions?Not stated on websiteParents and childrenNot stated on websiteParents, and children with signature from parent
Special eligibility requirementsMust hold a JFCU membership and savings account with $5 minimum depositMust hold an Alliant membershipNot stated on websiteNot stated on website

What are the pros and cons of kids’ savings accounts?

Kids’ savings accounts have these benefits and drawbacks:


  • Teaches kids about money. With a savings account, your kid learns about budgeting, as well as the importance of saving and spending wisely.
  • Sets kids up for financial success. Research shows that kids who have any type of savings account are more likely to both go to college and graduate. These same children are also more likely to invest in stocks as adults.
  • Interest bearing. By making small deposits each month, a child’s savings account could earn a decent amount in interest and may earn better rates compared to accounts for adults.
  • Usually no fees. The best savings account for kids typically has fewer fees and costs than other types of accounts, but some may still apply. Read the fine print and watch out for minimum balance requirements, monthly statement fees and other charges.
  • Low age requirements. Accounts are available for both kids and teens. You can even open a savings account for your baby as soon as you receive the birth certificate and take advantage of compound interest.


    • The taxes could be quite high. Children’s savings accounts are still subject to taxes, especially if the amount exceeds the kiddie tax threshold.
    • Restrictions. These accounts typically don’t come with a debit card. And depending on which bank you choose, you may need to be a member before you can open an account.
    • Account transfer. Some banks will automatically convert the account to a student or teen checking account, while others may require you to transfer the funds to a new account yourself.
    • Transaction access. Some accounts allow your kids to deposit or withdraw funds of their own volition, while others require a parent’s signature. Look into who’s required to legally sign their name in order to access funds.
    • There’s an age limit. By the time children turn at least 18, they’re no longer eligible for a kid’s savings account. But some banks may have even stricter age requirements.

      Read up on the best student savings accounts

      Educational resources and kids’ programs

      Many banks provide community programs, educational games, online activities and other ways for kids to learn about money. These resources can help your child understand the concept of saving from a young age and can help bring it all to life in a hands-on way.

      Alliant Credit Union Kids Savings Account

      Alliant Credit Union partnered with Visa to offer “The Money Guide,” an introduction to money management for kids ages eight to 12. Through a collection of games, calculators, worksheets and podcasts, your kids will learn the basics of budgeting, saving and borrowing — and how to apply these topics to their everyday life.

      Capital One Kids Savings Account

      While Capital One doesn’t have a learning center or guide to money for kids, it does have a great mobile app and online platform. You can use these tools to set savings goals, make routine deposits and teach your child the benefits of saving from an early age.

      Justice Federal Credit Union

      Though JFCU doesn’t offer a program on online banking, it does have one on cyber safety. The credit union teamed up with the FBI to offer their Safe Online Surfing Internet Challenge, which teaches students in third through eighth grades how to recognize and respond to online threats.
      Read up on how to compare bank accounts for your baby

      Bottom line

      The best savings account for kids teaches them how to set goals and manage their money, but it doesn’t charge you huge fees to do it. As always, compare your options until you find an account that’s right for you kid.

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