Is it time for you to open a bank account for your child? The best bank accounts for kids include features that help you teach them about money management, earning interest, and more.
Kids’ checking accounts often include debit card usage too, which can be a great feature if you want your child to learn how to manage spending using a debit card.
Here are the details regarding some of the best checking and savings accounts for getting your kids on the path to great money management in adulthood.
Table of Contents
- Best Checking Accounts for Under 18
- Best Savings Accounts for Kids
- Capital One Kids Savings Account
- Alliant Credit Union Kids Savings Account
- Northpointe Bank Kids Savings
- First Internet Bank Tomorrow’s Tycoons
- Should You Open a Joint Account or a Custodial Account?
- What Do You Need to Open a Child’s Bank Account?
- What Happens to a Child’s Bank Account When the Child Turns 18?
- Summary
Best Checking Accounts for Under 18
It might sound risky to set up a checking account for your minor child. However, today’s bank accounts for kids come with attractive parental controls that can reduce the risk of fraud or of overspending.
Here are some of our favorite checking accounts for kids. We chose the accounts featured here based on affordability, ease of use, and parental control features.
Copper Banking App
Copper Banking is a fintech company offering an account for teens aged 13 to 17. When you open a Copper account for yourself, you can open a Copper account for your teen as well.
Features:
- Monthly fee: $0
- Minimum opening deposit: $10
- Minimum balance after opening: None
- Debit card fee: No monthly, free at over 55,000 Allpoint ATMs
- Overdraft fee: None
- Interest earned: None
You can transfer money to your teen as needed. Or you can set up an auto-transfer so money, such as an allowance, goes into your teen’s account on a regular basis.
As a parent, you can transfer money to your Copper account via an outside bank account or via another source such as PayPal or Venmo.
Another great feature of Copper is its learning section, called Cheat Codes.
Cheat Codes has a number of articles that can help teach your teen about personal finance, from mortgages to budgeting.
Copper allows Direct Deposits to both teen and parent accounts too. And each parent account has the option to link up to five teen accounts.
Your Copper funds are FDIC insured through Evolve Bank & Trust.
Bonus: All account owners get referral codes. When you or your teen refers a friend to Copper, and the friend opens an account using the referral code, Copper pays a $3 referral bonus.
Axos Bank First Checking
Axos Bank also has a great checking product for kids. Axos’ First Checking is available for kids aged 13 to 17 when opened jointly with a parent.
Features:
- Monthly fee: $0
- Minimum opening deposit: $0
- Minimum balance after opening: None
- Debit card fee: No monthly, free at in-network ATMs
- Overdraft fee: None
- Interest earned: 0.10% as of this writing
Axos will reimburse you up to $12 per month for any ATM fees you or your teen incur. And there’s a $100 cash withdrawal/$500 purchase limit per day on this account.
You can also monitor account activity and lock/unlock the debit card from your banking dashboard.
Axos has a peer-to-peer transfer feature as well. This makes it easy for teens to transfer money from their account to a friend’s Axos account.
Bonus: Axos will pay $20 for qualifying referrals. See the Axos website for more information.
Capital One MONEY Teen Checking Account
Capital One’s MONEY Teen Checking account is open to kids 8 and up. This account must be a jointly held account with a parent.
However, you as a parent are not required to have a separate Capital One account to open a MONEY account. You can simply transfer funds to the MONEY account from any external bank account.
Features:
- Monthly fee: $0
- Minimum opening deposit: $0
- Minimum balance after opening: None
- Debit card fee: No monthly, free at over 40,000 in-network ATMs
- Overdraft fee: See Capital One website for more information
- Interest earned: 0.10% as of this writing
The maximum debit card total for cash withdrawals and purchases is $500 per day.
The MONEY Teen Checking account comes with parental controls such as activity monitoring, lock/unlock card, and auto-transfer for allowances.
The parent and child apps work well together so that both parent and child know what’s going on with the account.
Best Savings Accounts for Kids
Having a savings account for your child can help them learn about money in many ways. It can teach them the art of discipline when it comes to saving their money.
And it can teach them the power of compound interest as they watch their balance increase effortlessly. Here are some of the best savings accounts for kids.
For this section’s selections we focused on accounts with attractive interest rates.
Capital One Kids Savings Account
Capital One makes our list again with its Kids Savings Account. This account can fit a variety of account holder needs.
Features:
- Monthly fee: $0
- Minimum opening deposit: $0
- Minimum balance after opening: None
- Interest earned: 0.30% as of this writing
This savings account has an automatic savings feature that helps ensure allowances are automatically transferred on a regular basis.
And Capital One has a goals feature that helps kids set specific savings goals.
Bonus: You can also open separate accounts for your child’s individual goals if you wish. This feature can be beneficial in helping kids learn the importance of saving for specific goals.
Alliant Credit Union Kids Savings Account
The Alliant Credit Union Kids Savings Account is open to kids aged 12 and under. Possibly the best feature of this account is the attractive interest rate.
Features:
- Monthly fee: $0 if you choose e-statements
- Minimum opening deposit: $5
- Minimum balance after opening: $5
- Interest earned: 0.55% for daily balances of $100 or more, as of this writing
Although the $100 minimum to earn interest might be disappointing, think of it as a way to encourage your child to save more money. No ATM cards are offered for kids with this account.
Note that you must be a member of Alliant Credit Union to open this account. Members must be current or former employees of partner companies.
You can make a donation to a supported charity of Alliant to become a member too.
Once your child turns 13, you can switch to another high-interest savings account or a teen checking account with Alliant.
Northpointe Bank Kids Savings
NorthPoint Bank’s Kids Savings account is the winner when it comes to interest rates.
While this account pays the highest rate by far, there’s a limit on balances it will pay out on.
Features:
- Monthly fee: $0 if you choose e-statements
- Minimum opening deposit: $10
- Minimum balance after opening: $0
- Interest earned: 1.50 % for daily balances under $1000, as of this writing
Although the 1.50% interest rate doesn’t pay on balances over $1,000, it will still pay 1.11% on balances from $1,000 to $10,000, and 0.35% on balances over $10,000.
Interest rates are subject to change, of course. And although this is a nice account on its own, Northpointe doesn’t offer a teen checking account.
However, with today’s online transferring capabilities you can still fund a Northpointe Bank savings account while having your teen’s checking account somewhere else.
First Internet Bank Tomorrow’s Tycoons
First Internet Bank’s Tomorrow’s Tycoons savings account is open to kids under 18. As with many savings accounts, there is no ATM card offered with this account.
Accounts must be joint ownership with a parent or legal guardian.
Features:
- Monthly fee: $0
- Minimum opening deposit: $100
- Minimum balance after opening: $0
- Interest earned: 0.25% as of this writing
Once your child turns 18 you can switch this account to First Internet Bank’s free savings account. That account has a $25 minimum balance and the same interest rate.
First Internet Bank has the distinction of being the first bank to exist entirely on the internet. The company offers a host of great banking products for virtual banking aficionados.
Check out all of their business and personal banking products for more information. Note that First Internet Bank does not offer a teen checking account.
Should You Open a Joint Account or a Custodial Account?
When you open a savings account for your minor children, you have the choice of opening a joint account or a custodial account (called UGMA or UTMA accounts).
But what are the differences between the options? And which should you choose for your child?
In a nutshell, opening a joint savings account with your child will give your child equal access/ownership to the funds, equal ability to withdraw funds independently, and so on.
This might not bother you if your child is aged 10 or under. However, once your child gets older and more independent or reaches driving age, this poses the risk of them withdrawing money without your permission.
A custodial account, on the other hand, is inaccessible by the child until they reach the age of 18.
While this protection benefit might sound appealing, be aware that there may be tax implications for holding a custodial account for your child.
Talk to your tax professional for more information. For most families, a joint account is sufficient.
What Do You Need to Open a Child’s Bank Account?
When you go to open your child’s bank account, you should expect to have several items of documentation on hand:
- Your driver’s license or other state issued ID
- Your Social Security number
- The child’s Social Security number
- The child’s birth certificate
Note that each bank has different rules about what is needed to open an account. However, the above list is standard for most banks, whether you open the account online or in person.
If you haven’t yet requested a Social Security number for your child, you can do so by following the instructions given by the Social Security Administration.
What Happens to a Child’s Bank Account When the Child Turns 18?
The bank accounts listed here were largely created for minor-age children. They have special rules and features that differ from bank accounts that were designed for adults.
At most banks, accounts that are designed for teens will automatically convert to the closest bank account product for adults that the bank offers.
However, although the bank regulations say that automatic conversion will happen, it often doesn’t.
For that reason, if your child turns 18 and you want the account you’ve opened for them to be converted to a different type of account, it’s probably best to call the bank and request the conversion.
If your name remains on a bank account with your over-18 child, you could be subject to fees or other penalties associated with the account should your child overdraw the account or have other issues with the account.
Summary
The best bank accounts for kids offer the features and benefits that are in line with a parent’s goals for teaching their kids about personal finance and money management.
And using a bank account can be a great way to teach your children the art of great money management.
If you aren’t ready for a full-fledged bank account you may be interested in kid’s debit cards instead. They offer a halfway point of allowing your kids access to money without having their own account. Here’s a list of our favorite kid’s debit cards.
You’ll do your kids a solid if you prepare them for leaving the nest armed with a full understanding of how to earn, budget, spend, and save their money.
