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Best savings accounts for kids in September 2024

Top kids savings accounts come with high rates and goal-setting features.

Parents and guardians have two main choices for opening a savings account for their kid: a joint account or a custodial account. Joint accounts allow both parent and child access to the funds. Custodial accounts for kids mean the account is in the kid’s name, but they won’t get access to the funds until they come of age — and until then, the parent or adult manages the account.

Regardless if you go for a joint account to teach your kiddo more responsibility or a custodial account to manage your little one’s funds for them, look for a savings account with high yields and low fees to better stack earnings.

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8 best savings accounts for kids

The best kids’ savings accounts offer high yields — higher than the national average of 0.40%, as reported by the Federal Deposit Insurance Corporation (FDIC). We’ve gathered the best accounts with high-interest earnings and low fees so young savers can stash away more cash.

Best overall

CIT Savings Connect

4.3
★★★★★

Finder score

Go to site Read review
APY 4.50%
Fee$0
Minimum deposit to open$100

Best for few fees

Discover® Online Savings Account

4.6
★★★★★

Finder score

Go to site
on Discover's secure site
Read review
APY 4.10%
Fee$0
Minimum deposit to open$0
Member FDIC

Best for spending and saving

Step Visa Card

4.7
★★★★★

Finder score

Go to site Read review
APY5.00%
Fee$0 per month
Minimum deposit to open$0

Best for teens

Capital One 360 Performance Savings

4.8
★★★★★

Finder score

Read review
APY 4.25%
Fee$0
Minimum deposit to open$0

Best for savings roundups

Ally Bank Savings Account

4.8
★★★★★

Finder score

Read review
APY 4.20%
Fee$0
Minimum deposit to open$0

Best for growing with your child

Finder Award Alliant Kids Savings Account

4.6
★★★★★

Finder score

Alliant Credit Union will pay the $5 initial deposit
Read review
APY 3.10%
Fee$1 per month
(can be waived)
Minimum deposit to open$5

Best for customer support

First Internet Bank Tomorrow’s Tycoons

4.3
★★★★★

Finder score

APY 0.81%
Fee$0
Minimum deposit to open$100

Best for flexibility

Prime Alliance Bank Personal Savings Account

APY 4.50%
Fee$0
Minimum deposit to open$0

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. As part of the analysis, we also consider all-in-one bank accounts that earn interest or bonuses on money kept in savings. The top accounts must meet the following criteria:

  • $0 monthly fees or easily avoidable with e-statements
  • APYs above 0.70%
  • No more than $100 to open the account
  • No strict membership requirements
  • Available in most states
  • Allows online applications
  • Must allow you to open as a joint or custodial account

Other kids’ accounts with savings features

Aside from traditional savings accounts, there are a myriad of other kids’ banking apps to consider. These accounts can give kids their own debit card, financial literacy tools, cashback rewards or even savings bonuses that work similarly to an APY.

For savings bonus

Finder Award Greenlight

4.6
★★★★★

Finder score

Get the first 30 days for free. After your one-month trial, plans start at just $5.99/month for the whole family. Includes up to five kids.
Go to site Read review
Maintenance Fees$5.99 monthly
Age requirementsAny age

For learning about saving

GoHenry

4.3
★★★★★

Finder score

Get 2 months free and $10 allowance when you sign up to GoHenry with Finder's exclusive code: AFFUSFDR10.
Go to site Read review
Maintenance Fees$4.99 monthly
Age requirements6 to 18 years old

Can I open a regular savings account for my kid?

Yes, as long as the bank allows you to open it as a joint or custodial account, you can open a traditional savings account on behalf of your child. Choosing a regular savings account lets you take advantage of higher interest rates than many kids’ savings accounts offer.

Compare savings accounts for kids

Narrow down savings accounts for kids APY, minimum deposit and potential earnings. Select the Compare box on up to four accounts to see their features side-by-side.

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1 - 4 of 4
Name Product USFSA Account type Annual Percentage Yield (APY) FDIC or NCUA insured amount Minimum balance to earn interest Minimum deposit to open Offer Estimated total balance
CIT Savings Connect
Finder Score: 4.3 / 5: ★★★★★
CIT Savings Connect
Traditional savings,Custodial account

4.50%

Up to $250,000
$0
$100
$1,045
Discover® Online Savings Account
Finder Score: 4.6 / 5: ★★★★★
Discover® Online Savings Account
Traditional savings,Custodial account

4.10%

Up to $250,000
$0
$0
$1,041
Liberty Savings Bank High-Yield Savings
Finder Score: 4.7 / 5: ★★★★★
Liberty Savings Bank High-Yield Savings
Traditional savings,Custodial account

4.60%

Up to $250,000
$0
$1
$1,046
UNest
Not rated yet
UNest
Custodial account app
APY not advertised
SIPC-insured up to $500,000
$0
$25
$1,000
loading

How to set up a custodial savings account for kids

Adults can set up custodial or joint savings accounts with their child or grandchild, often finding a higher interest rate than with kid-specific savings accounts. To get started:

  • Call the bank or visit in person. Banks don’t usually advertise which accounts you can open as a custodial or joint account with a minor. Ask a rep about your preferred account to know for sure.
  • Provide personal information. To apply, you’ll need the name, birthdate and Social Security numbers for both you and your child, as well as your government-issued ID. Give the rep all this information or provide it online if you’re able to use an online application.
  • Fund your child’s account. You’ll usually provide the account and routing numbers for your checking account along with the dollar amount you’re transferring.
  • Download the app. You and your child can download the bank’s app to log in and view your child’s balance. Or you might choose to show young kids their balance from your app.

Pros and cons of kids’ savings accounts

Keep these things in mind before opening a kids’ savings account:

Pros

  • Reputable accounts insured by the FDIC or NCUA
  • Sets kids up for financial success
  • Many are free to open and maintain
  • Savings accounts are open to kids of all ages

Cons

  • Many savings accounts don’t have ATM access
  • The account may change once the child turns 18
  • Some kid accounts may be subject to kiddie tax

Tax implications of children’s savings accounts

Kids have to pay taxes, too. 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.

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

5 kids’ savings account alternatives

Aside from personal savings accounts, parents and guardians can look into other accounts, such as child investment accounts.

  • UTMA accounts — A Uniform Transfers to Minors Act (UTMA) account is a type of custodial savings account 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.
  • UGMA accounts — Similar to a UTMA, a Uniform Gift to Minors Act (UGMA) is another type of custodial account that only allows custodians to make deposits in the form of bank deposits, stocks, bonds, mutual funds, other securities and insurance policies.
  • 529 plans — A popular child investment strategy, 529 plans let you choose between a prepaid tuition plan or an education savings plan. They’re sponsored by state agencies and let you set aside funds for your kid’s higher education.
  • Certificates of deposit — CDs have guaranteed interest rates and earnings as long as you keep your funds in the account for a certain amount of time. Parents and guardians can open these and act as a custodian for their child.
  • Custodial IRAs — For minors with earned income, parents and guardians can open a tax-advantaged IRA for their kids and act as a custodian until the kid reaches the age of maturity.

Bottom line

The best kids’ savings accounts earn high rates and teach kids how to set goals and manage their money, but it also comes 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 safely spend and save, consider other kids’ accounts, such as a checking account or prepaid card.

Holly Jennings's headshot
To make sure you get accurate and helpful information, this guide has been edited by Holly Jennings as part of our fact-checking process.
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Written by

Editor, Banking

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

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