Best Savings Accounts for Kids in 2021

By Carly Marie

August 9, 2021

Hispanolistic / iStock.com

The relationship we have with money is formed at an early age. Children as young as five have developed emotional reactions to spending money, according to a study done by the University of Michigan. Talking about money with your children and helping them form saving habits now could help them develop a healthy relationship with money.

This is where savings accounts come in. They can be a great way to share with your child some of the basics of the financial system, get them comfortable with banks as well as compound interest and help them develop healthy spending and saving habits. It’s also a good tool to teach them about setting goals. Your children can start saving up money for the things they want to buy and learn early about how rewarding it is to reach those goals.

Best Savings Accounts for Kids in 2021

The savings accounts on this list all have low minimum deposits, zero fees, and a decent annual percentage yield. Some of them also have educational tools specifically for children. Banks with physical locations where children can go to interact with bankers and physically deposit money were given bonus points because children are more likely to have cash than money via direct deposit.

1. American Express® High Yield Savings

The American Express® High Yield Savings account can work well for anyone, and it’s also available to children. The account can connect up to three accounts from any bank, so family members can easily deposit cash into the child’s account.

Benefits:

• No fees
• High annual percentage yield
• Easy online access
• Wide network of ATMs
• Ability to connect accounts

Drawbacks:

• No physical branches

Fees:

• None

Minimum Deposit:

• $1 to open

Minimum Balance:

• None

Balance To Avoid Fees:

• None

APY:

• 0.90%

Best For:

• Families who want to conveniently add to their child’s savings account

2. Garden Savings Federal Credit Union

The Kids Club Savings account is specifically for members 18 and under and offered through Garden Savings Federal Credit Union. Its most unique feature is access to games and educational resources that are relevant for a variety of ages — from children to teens to young adults. The account also pays interest on the entire balance.

Benefits:

• Higher-than-average APY
• No fees
• Low minimum deposit

Drawbacks:

• Membership required

Fees:

• Zero fees

Minimum Deposit:

• $5 to open

Minimum Balance:

• None

Balance To Avoid Fees:

• None

APY:

• 0.50%

Best For:

Kids who want to start a savings account with little money

3. Northpointe Bank

The Kid’s Savings Account from Northpointe Bank offers a competitive APY compared to banks. Plus, even though the APY drops for balances exceeding $1,000, the rates are still quite competitive.

Benefits:

• High APY compared to other kids’ savings accounts
• No account maintenance or minimum balance fees

Drawbacks:

• Balances in excess of $1,000 earn a lower APY
• Account must be opened by phone or in person

Fees:

• $10 fee if account is closed within 120 days of opening date

Minimum Deposit:

• $10 to open

Minimum Balance:

• None

Balance To Avoid Fees:

• None

APY:

• 1.50%

Best For:

• Kids and teens who have serious savings goals.

4. First Internet Bank

First Internet Bank’s Tomorrow’s Tycoon account is what it refers to as a digital piggy bank for kids under 18. At 18, the account converts to a Free Savings account. But beware, the minimum opening deposit is steep compared to what some other banks require.

Benefits:

• Free savings account when account holder turns 18
• No fees

Drawbacks:

• Online-only bank
• Higher minimum deposit required

Fees:

• None

Minimum Deposit:

• $100 to open

Minimum Balance:

• None

Balance To Avoid Fees:

• None

APY:

• 0.25% APY

Best For:

• Kids who have an opening deposit of at least $100

5. Justice Federal Credit Union

The Young Savers account at Justice Federal Credit Union has a low opening deposit and will help your child learn the basics about earning through dividends. The best part is that kids don’t have to have but just a little bit of money to get the account started.

Benefits:

• Educational resources
• No fees for users under 18

Drawbacks:

• Low APY
• Minimum deposit required

Fees:

• Zero fees for children under the age of 18

Minimum Deposit:

• $5 to open

Minimum Balance:

• None

Balance To Avoid Fees:

• None

APY:

• 0.15% – 0.20%

Best For:

• Children who need a basic savings account with a low opening deposit

6. M&T Bank

The M&T Starter Savings Account offers account holders the option of using M&T’s Easy Save feature to automatically transfer money from an M&T checking to savings account, which is great for teens who are earning a paycheck.  Plus, the account allows for setup options that allow children to have full access.

Benefits:

• Automatic savings feature
• No minimum balance requirement
• No fees for users under 18

Drawbacks:

• Low APY
• You must visit a branch to open the account

Fees:

• Zero fees for children under the age of 18

Minimum Deposit:

• None

Minimum Balance:

• None

Balance To Avoid Fees:

• None

APY:

• 0.01% – 0.02%

Best For:

• Children who will benefit from learning how to save with minimal emphasis on earnings

7. PNC S is for Savings

The PNC S is for Savings account is specifically for children and offered through PNC Bank. Its most unique feature is an online interactive experience for children featuring Sesame Street characters. The account also allows children to set savings goals.

Benefits:

• Educational resources
• Wide availability of physical locations and ATMs
• No fees for users under 18

Drawbacks:

• Low APY
• Minimum deposit required

Fees:

• Zero fees for children under the age of 18

Minimum Deposit:

• $25 to open

Minimum Balance:

• None

Balance To Avoid Fees:

• $300 for account holders age 18 and up

APY:

• 0.01%

Best For:

• Young children who will benefit from the Sesame Street educational resources

8. Bank of America Minor Savings Account

The Bank of America Minor Savings Account is easy to manage if the parent is already a customer, plus Bank of America has a high number of brick-and-mortar locations available nationwide.

Benefits:

• No minimum balances or fees
• Slightly higher APY than PNC

Drawbacks:

• No online educational tools to help your child learn about finances
• Minimum deposit required

Fees:

• No fees

Minimum Deposit:

• $25 to open

Minimum Balance:

• None

Balance To Avoid Fees:

• None

APY:

• 0.01%

Best For:

• Kids who have parents who are Bank of America account holders

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9. BECU Early Savers Account

The BECU Early Savers Account offers children an especially high APY on the first $500. This account is a great way for kids to see the power of compound interest right away.

Benefits:

• No fees
• High APY
• No minimum deposit

Drawbacks:

• Physical branches limited to Washington state
• Parent must have an account in order to open a minor savings account
• No online application
• APY drops to 0.10% on balances of $500 or more

Fees:

• None

Minimum Deposit:

• None

Minimum Balance:

• None

Balance To Avoid Fees:

• None

APY:

• 4.07% on the first $500

Best For:

• Kids who have parents who are BECU account holders

10. Spectrum Credit Union MySavings

The Spectrum Credit Union MySavings account is another great way to get young people excited about earning interest. Spectrum’s bank account has a really high interest rate on balances up to $1,000. The account is available to children up to the age of 21, which gives your kid an extra few years before they have to think about opening a different kind of account.

Benefits:

• No fees or minimums
• High APY up to a certain balance amount
• Online accounts for customers who don’t live near a physical location

Drawbacks:

• Physical locations limited to California, Texas, Virginia, Utah, Louisiana and Mississippi

Fees:

• None

Minimum Deposit:

• None

Minimum Balance:

• None

Balance To Avoid Fees:

• None

APY:

• 6.77%(7.00%) on balances up to $1,000

Best For:

• Kids who live in California, Texas, Virginia, Utah, Louisiana or Mississippi

11. Capital One Kids Savings

A simple, no-fees account, Capital One Kids Savings offers an APY that applies to all balances with Capital One. It connects to parents’ accounts and offers a certain amount of easy parental control and oversight.

Benefits:

• APY applies to all balances
• Wide network of ATMs
• No fees or minimums
• App connects to parents’ accounts and allows children to set up savings goals

Drawbacks:

• Limited physical locations
• Lower APY than some other banks on the list

Fees:

• None

Minimum Deposit:

• None

Minimum Balance:

• None

Balance To Avoid Fees:

• None

APY:

• 0.30%

Best For:

• Kids who are interested in setting up online savings goals

12. Alliant Credit Union Kids Savings

The Alliant Credit Union Kids Savings account is available for children 12 and under. Alliant Credit Union provides an easy, no-fee account with a high APY and parental control.

Benefits:

• Good APY
• Joint management with parents
• No fees or minimums
• Alliant contributes first $5

Drawbacks:

• Restricted to children age 12 and under
• Limited physical locations

Fees:

• None if you opt out of paper statements

Minimum Deposit:

• None

Minimum Balance:

• None

Balance To Avoid Fees:

• None

APY:

• 0.60%

Best For:

• Kids 12 and under due to account age restrictions

13. Wells Fargo Way2Save

The easy, no-fees Wells Fargo Way2Save account offers a high number of branch locations and a variety of ways to deposit money. This account happens to be available to anyone of any age, but it’s especially great for children.

Benefits:

• No fees for those under 18
• Many physical locations

Drawbacks:

• Low APY
• Account incurs fees once the child turns 18
• Minimum deposit required

Fees:

• None for children under 18

Minimum Deposit:

• $25 to open

Minimum Balance:

• None for minors

Balance To Avoid Fees:

• $300 for account holders age 18 and up

APY:

• 0.01%

Best For:

• Kids who like to make savings deposits in person

14. Ally Bank Savings Account

The savings account from the online bank Ally offers a high APY and highly regarded 24/7 customer service. It’s easy to open other kinds of accounts and services with Ally Bank once you’ve opened a savings account.

Benefits:

• High APY
• No fees or minimums

Drawbacks:

• No physical locations

Fees:

• None

Minimum Deposit:

• None

Minimum Balance:

• None

Balance To Avoid Fees:

• None

APY:

• 1.00%

Best For:

• Kids who value a high APY over being able to make deposits at a branch location

15. Live Oak High-Yield Online Savings

Live Oak High-Yield Online Savings is a great option with the highest regular APY of any bank on this list. It’s an online bank, so it’s available nationwide.

Benefits:

• Highest regular APY on the list
• No age limit

Drawbacks:

• There is only one physical branch location.

Fees:

• None

Minimum Deposit:

• None

Minimum Balance:

• None

Balance To Avoid Fees:

• None

APY:

• 0.60%

Best For:

• Kids who don’t mind doing all their banking online

Other Ways To Start Savings and Investments for Kids

Savings accounts are not the only options available for children. Here are some of the other ways to start savings and investments for kids:

CDs

Certificate of deposit accounts are FDIC-insured deposit accounts that typically earn higher interest rates than savings accounts. The downside of these accounts is that there is a fixed date of withdrawal, and until that date, you usually can’t access the funds without paying a penalty. GOBankingRates’ guide to the Best CD Rates and Accounts of 2021 explains the benefits and details of 2020’s best offerings.

Savings Bonds

Savings bonds are a way to earn interest by loaning money to the government. As noted in GOBankingRates’ What Is a Savings Bond and How Does It Work?, the bonds are sold at a fixed value, and the government pays you back with interest. You can ask for the money back at various times, but you get the most out of it if you wait until the bond fully matures. It’s important to note that getting the money back is not exactly an instantaneous process.

Money Market Accounts

You can get detailed information about the ins and outs of money market accounts in GOBankingRates’ What Is a Money Market Account? guide, but in a nutshell, money market accounts are another type of high-interest account. Although these accounts have certain restrictions, they often have check-writing features that some people might find useful. The downside is that money market accounts often require high minimum deposits.

Tips To Get Your Kids To Save

Kids can be motivated to save if you show them how they can benefit from waiting for interest to build and they can see how saving money helps them make bigger purchases.

Help kids save by:

• Setting up different accounts for spending and saving
• Setting up savings goals — both small ones, like for a toy, and big ones – like for college
• Showing them how their money grows
• Teaching them about the financial system once they’re old enough to understand

Check out this infographic for some ideas on getting your kids to save:

Choosing the Best Savings Account for Kids

Saving accounts are a great tool for introducing children to finances. With many options available, you can choose the account with the features that best suit your priorities, such as physical locations or high APY. The most important thing is to look for an account with no fees and low minimums to avoid your children getting charged for having a low balance.

Daria Uhlig contributed to the reporting for this article.

Fees and minimums are accurate as of Jul. 27, 2021. Additional requirements may apply. Offers, terms and rates are subject to change.

GOBankingRates is a personal finance and consumer interest rate website owned by ConsumerTrack Inc., an online marketing company serving top-tier banks, credit unions and other financial services organizations. Some companies mentioned in this article might be clients of ConsumerTrack Inc., which serves more than 100 national, local and online financial institutions. Rankings and roundups are completely objective, and no institution, client or otherwise, paid for inclusion or specific placement. Any opinions, analyses, reviews or recommendations expressed in this article are those of GOBankingRates alone and have not been reviewed, approved or otherwise endorsed by the companies included in the article. All fees and rates are subject to change at the issuers’ discretion. Some interest rates might be short-term or promotional offers only, and it is possible additional terms and conditions must be met to obtain the interest rates listed. Rates and availability might vary by region. Verify terms and conditions before opening an account.

GOBankingRates bases its assessment of “best” and “top” products on the above-stated parameters to create a baseline for comparison. This assessment is an approximation of “best” and “top” designed to help consumers find products that might be appropriate for them. There could be other options available as well. Consumers should consider various options appropriate for their circumstances.

About the Author

Carly Marie

Carly Marie is a content marketing specialist from Florida, currently living in Indiana. She received her BA in English at Florida State University in 2015 and got her start working in the eLearning industry. She began as a copy editor working on online classes related to a variety of topics, including business and finance. She later moved into content marketing and SEO strategy. She has been helping clients in the finance industry educate and connect with their audiences since 2019