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Best Savings Accounts for Kids, Teens & Students

Opening a kids savings account is one of the most practical steps a parent or guardian can take to set a child up for long-term financial success. Whether a family is saving for a first car, college, or simply teaching the habit of putting money aside, the right account can make a meaningful difference. This guide covers what to look for in a child savings account, how different account types work, and what options may be worth considering for children of different ages — from newborns through college students.

Families ready to start comparing options can explore CompareAccounts.com’s savings account hub for side-by-side tools that evaluate features, rates, and account requirements.

Why Open a Savings Account for a Child?

Children who learn about money management early are more likely to develop healthy financial habits as adults. A dedicated savings account for kids offers several practical and educational benefits:

• Earning interest: Even modest interest earnings introduce children to the concept of money working over time.
• Goal-setting: Many accounts allow parents and children to nickname accounts or create sub-goals, helping kids learn to save with a purpose.
• Financial literacy: A real account with real money provides tangible experience with deposits, balances, and the passage of time.
• Parental oversight: Joint or custodial accounts keep adults in control while allowing children to observe — and eventually participate in — managing their own money.
• FDIC or NCUA protection: Funds held at insured banks and credit unions are protected up to applicable limits.

Starting early means more time for interest to accumulate. Even small, consistent contributions can grow substantially over a child’s formative years.

Types of Savings Accounts for Kids

Families typically have several account structures available when saving for kids. Each comes with its own rules, tax treatment, and level of parental control.

Joint Savings Accounts

A joint savings account is co-owned by both the parent (or guardian) and the child. Both parties are equal account holders, which means the adult retains full access and control. Many banks offer joint accounts with no minimum age requirement — some can be opened for a newborn. Because the account is in the parent’s name as well, the adult typically pays taxes on interest earnings at their own rate. Joint accounts are often the most flexible for everyday use and short-term savings goals.

Custodial Savings Accounts

A custodial account is owned by the child but managed by an adult (the custodian) until the minor reaches a certain age — typically between 18 and 25, depending on state law. The funds legally belong to the child and cannot be reclaimed by the parent; contributions are irrevocable gifts. Custodial accounts may include plain savings accounts at a bank or credit union, or investment-focused brokerage accounts.

UTMA and UGMA Custodial Accounts

UTMA (Uniform Transfers to Minors Act) and UGMA (Uniform Gifts to Minors Act) accounts are custodial accounts established under state law that allow adults to transfer assets to a minor without setting up a formal trust.

• UGMA accounts hold financial assets only: cash, stocks, mutual funds, and bonds.
• UTMA accounts allow a wider range of assets, including physical property such as real estate.
• Both are subject to the “kiddie tax”: the first $1,350 of unearned income is tax-free; the next $1,350 is taxed at the child’s rate; amounts above $2,700 are taxed at the parent’s rate (2026 thresholds).
• Contributions are not subject to income limits but may be subject to gift tax rules. Individuals may contribute up to $19,000 per year ($38,000 for married couples) without incurring gift tax as of 2026.
• Assets held in the child’s name may reduce eligibility for need-based college financial aid.

UTMA/UGMA accounts may be worth considering for families looking to invest on behalf of a child without establishing a formal trust. For families focused on higher deposit yields, a high-yield savings account opened as a custodial or joint account may offer a competitive alternative.

What to Look for in a Youth Savings Account

Not all youth savings accounts are created equal. Consumers looking to open a savings account for a child might consider the following factors:

Age Requirements

Some accounts have no minimum age — a parent or guardian can open one for a newborn. Others restrict eligibility to children under a certain age (such as 12 or 17), after which the account converts to a standard product or a teen-focused account. Confirming both the minimum and maximum age eligibility before applying is advisable.

Annual Percentage Yield (APY)

Interest rates on dedicated kids savings accounts vary considerably. Some accounts — particularly at credit unions — offer elevated rates, but only on limited balance tiers (for example, the first $500). Once a balance exceeds that threshold, the rate may drop sharply. Families expecting to accumulate larger balances may find that a high-yield savings account opened as a custodial or joint account offers a more competitive ongoing rate.

As a general reference, dedicated kids savings accounts currently offer APYs ranging from approximately 0.01% at traditional banks to highly competitive APYs at certain credit unions. High-yield savings accounts generally offer top-tier rates on all balances. Rates change frequently and should be verified directly with the institution.

Fees and Minimum Balances

Monthly maintenance fees can erode a child’s modest savings balance quickly. Consumer-friendly kids savings accounts typically charge no monthly fee and require no minimum balance — or waive fees automatically for account holders under a certain age (often 18 or 25).

• Look for: No monthly maintenance fee, or one that is automatically waived for minors
• Watch for: Fees triggered by falling below a minimum daily balance
• Consider: Paper statement fees — opting into electronic statements typically avoids these

Parental Controls

For parents who want oversight without removing all independence, parental controls are an important feature. These may include real-time transaction alerts, spending limits or category restrictions on linked debit cards, restrictions on the child’s ability to transfer funds without approval, and parent-only deposit access for younger children with increasing autonomy as the child ages.

Financial Education Tools

Some institutions build financial literacy directly into the account experience through in-app goal trackers, interactive games, savings challenges, and budgeting tools. These features are particularly valuable for younger children who are just beginning to understand money concepts.

FDIC or NCUA Insurance

Confirming that an account is insured by the Federal Deposit Insurance Corporation (FDIC) for banks, or the National Credit Union Administration (NCUA) for credit unions, provides an important layer of protection. Standard coverage applies up to $250,000 per depositor, per institution.

How to Open a Kids Savings Account

Opening a savings account for a minor is generally straightforward. Most banks and credit unions allow applications online or in person at a branch.

What to Gather Before Applying

• For the child: Full legal name, date of birth, Social Security number, and residential address
• For the parent or guardian: Government-issued photo ID, Social Security number, and current address
• Initial deposit: Many accounts require a small opening deposit — often $5 to $25, though some waive this requirement entirely

Step-by-Step Process

1. Research options. Compare fees, rates, age eligibility, and features across multiple institutions. Online banks and credit unions often offer competitive rates with low fees.
2. Check membership requirements. Credit unions may require membership through a qualifying organization or geographic affiliation. Some allow anyone to join via a small donation to a partner nonprofit.
3. Apply online or in person. Many institutions complete the application online in minutes. Taking a child to a branch in person can be a useful educational experience in itself.
4. Fund the account. Transfer an initial deposit, or let a child bring in cash or coins to make the first deposit themselves.
5. Set up alerts and controls. Configure parental notifications, spending limits, and oversight tools before handing the child any account access.

Age-Specific Guidance

The right account type and features often depend on the child’s age and financial maturity.

Children Under 13

For younger children, a joint or custodial account opened and managed by a parent is the standard approach. The primary goals at this stage are building the savings habit, introducing interest concepts, and providing a safe place for birthday money, allowance, and gifts.

Consumers looking for accounts for young children might consider options with no minimum balance requirements, financial literacy tools designed for early learners (games, goal trackers, visual savings meters), parent-controlled transfers with view-only access for the child, and no or low fees that will not erode small balances. Some credit union kids savings accounts offer elevated rates on the first $500, which may be worth considering for families focused on yield at modest balances.

Teens Ages 13–17

Teenagers may be ready for more autonomy, including depositing money, monitoring their own balance, and transferring funds between a savings account and a linked spending account. Many institutions offer teen-specific products — including joint checking accounts with debit cards — alongside savings options.

For teens, features that may be worth looking for include debit card access with customizable parental spending limits, the ability to set up multiple savings goals, peer-to-peer transfer capability for receiving allowance, and transition options that convert smoothly to adult products at age 18. Teens who earn income from part-time work may also become eligible to open a Roth IRA; contributions cannot exceed earned income for the year, up to the $7,000 annual IRA limit in 2026.

College Students Ages 18 and Older

Once a student turns 18, they can open accounts independently in most states. The priority typically shifts from educational features toward maximizing interest on a growing balance.

College students and young adults might consider:

• High-yield savings accounts from online banks, which offer highly competitive APYs with no monthly fees or minimum balance requirements
• Student-specific accounts at traditional banks that waive monthly fees for enrolled students or account holders under age 25
• Credit union membership through a college’s affiliated credit union, which may offer competitive rates and student-oriented services

For students building an emergency fund or saving toward a goal, high-yield savings accounts may offer meaningfully better returns than standard savings options. Comparing rates across multiple institutions before choosing an account is generally advisable.

Comparing Your Options

When evaluating a best child savings account or student savings account, comparing these key dimensions side by side may help narrow the choices:

• APY: What rate does the account pay, and on what balance tier?
• Fees: Are monthly fees charged? Are they waived for minors or students?
• Minimum balance: Is there a minimum opening deposit or a minimum to earn interest?
• Age eligibility: What is the minimum and maximum age? Does the account convert at 18?
• Parental controls: What oversight tools and alerts are available?
• Educational tools: Does the account include age-appropriate financial literacy resources?
• Membership requirements: For credit unions, is membership easy to obtain?
• Digital experience: Is the mobile app highly rated and straightforward for both parent and child?

Families comparing multiple accounts may find it useful to review CompareAccounts.com’s best savings accounts rankings, which aggregate current rates and features across a wide range of institutions.

Frequently Asked Questions

Do kids pay taxes on savings account interest?

Yes, children are subject to taxes on interest earnings. Under the IRS “Kiddie Tax” rules, the first $1,350 of a child’s unearned income (like interest or dividends) is tax-free. The next $1,350 is taxed at the child’s tax rate. Any unearned income above $2,700 is taxed at the parent’s tax rate.

What happens to a custodial account when the child turns 18?

When a minor reaches the age of majority (which is 18 or 21, depending on your state), the custodial account legally becomes their property. The custodian (parent) loses control of the account, and the young adult gains full access to use the funds however they choose.

Can a child have a debit card with their savings account?

Typically, debit cards are linked to checking accounts, not savings accounts. However, many banks offer joint “teen checking” accounts for kids starting around age 13, which come with debit cards and robust parental spending controls.

Conclusion

A kids savings account — whether a joint account, custodial account, or UTMA/UGMA vehicle — can serve as both a practical financial tool and an early introduction to money management. The best child savings account for any given family depends on the child’s age, the family’s savings goals, and the features that matter most: APY, fees, parental controls, and educational resources.

For younger children, accounts with low barriers to entry, robust parental oversight, and engaging financial literacy tools may be worth prioritizing. For teenagers, accounts that offer real-world spending practice with appropriate guardrails may be a better fit. For college students, maximizing interest on a growing balance — through a high-yield account — often becomes the primary consideration.

The habit of saving builds over time. Opening an account early, making regular contributions, and involving children in the process are among the most straightforward ways to build a foundation for long-term financial wellbeing. Explore current options and compare features at CompareAccounts.com’s savings center.