I’m a firm believer in the importance of teaching children about money. It’s critical for them to learn about financial responsibility and how to reach their goals. One essential way to teach them is to open a bank account for your kids with you as a joint account holder.
By opening a kids bank account, you begin what will hopefully be a lifelong financial literacy journey. From basic budgeting skills to establishing long-term savings goals, a bank account helps children learn building blocks that will serve them well in life.
This guide covers the best bank account for kids and what to know when opening a checking or savings account for your child.
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Best Kids Bank Accounts
Do you want to help your child learn about saving and setting goals? Here are the top seven kid-friendly bank accounts. Each has low minimum balance requirements and little to no fees.
1. Copper Banking
Copper offers one of the best bank accounts for teens. The banking app is designed specifically for children ages 13 to 17 and has loads of educational resources geared towards helping you and your child learn about money.
Your teen can use the linked debit card to shop at their favorite stores. They can also use it to withdraw cash for free at over 55,000 ATMs nationwide.
Before you worry that your child will have unfettered access to funds, the app lets you monitor spending. You can also send cash to their account within seconds.
The Automatic Savings feature allows you to set rules for them to automatically save a portion of all money they receive or earn.
Copper provides bank-level security and $250,000 in FDIC coverage.
If you’re looking for a fee-free checking account for minors, Copper is worth considering.
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Copper Banking Account opening bonus: $0 Yield: None Maintenance fees: NoneSee Details |
2. Greenlight
One alternative to opening a custodial bank account is a reloadable prepaid debit card. This lets you teach teens how to make smart financial decisions.
Greenlight is a leader in the prepaid debit card space. The app lets you help your child manage spending money and develop smart financial habits.
Unlike Copper, there is no minimum age to use Greenlight. However, it does have similar features, like automated allowance transfers, real-time notifications of spending, and customizable spending and savings goals.
This is very helpful if your child works at a place that hires at 14 and want to actively manage their income.
Some plans with Greenlight even allow you to help your child start investing.
Greenlight has bank-level security and FDIC coverage. If you want a unique way to teach your child about money, Greenlight is worth considering.
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Greenlight
Account opening bonus: $0
Yield: None
Maintenance fees: $4.99, which includes debit cards for up to five children
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3. Alliant Credit Union
Alliant Credit Union is a true kids savings account. The account is only for children under 13 years old. Once open, the child can keep the account as long as they wish.
All withdrawal and spending activity is reviewable by parents to prevent unwise usage of the funds. Alliant also gives new account owners a $5 bonus when opening an account.
To open an account, you must be a member. If you are a current or former employee of partner organizations, you can join the credit union.
Alliant offers other minor-friendly bank accounts for when your child is over 13 years of age. Account options include interest-bearing checking accounts.
The credit union offers insurance coverage through the National Credit Union Administration (NCUA), which is similar to FDIC protection.
If you want a savings account for kids that pays decent interest, Alliant Credit Union is worth considering.
Minimum deposit requirement: $5
Account opening bonus: $5
Yield: 0.55 percent on balances over $100
Maintenance fees: None
4. Capital One MONEY Teen Checking Account
If you’re looking for a checking account for kids, the Capital One Money Teen Checking account is a good choice.
The account is specifically for children ages 13 to 17. It has no minimum balance requirements and pays a modest interest rate.
Capital One doesn’t issue checks for this account type, but it does come with a debit card your teen can use for purchases. The institution also offers numerous budgeting and financial education tools for your teen to learn financial literacy.
Like other teen checking accounts, you can create alerts for spending and other account actions. You’ll also receive the same FDIC coverage you’ll find at other financial institutions.
Account holders can withdraw cash at over 40,000 ATMs fee-free.
Capital One is a worthy consideration if you want access to budgeting tools to help your teen to learn how to manage their money wisely.
Minimum deposit requirement: $0
Account opening bonus: $0
Yield: 0.10 percent interest on all balances
Maintenance fees: None
5. PNC Bank
Making money fun and engaging is an excellent way to encourage kids to learn. That is where PNC shines, making it one of the best savings accounts for kids.
The account is geared towards children under 18. For younger children, they have a Learning Center led by Sesame Street characters that engage them on their journey to learning about money.
Additionally, the account breaks funds into three buckets, including saving, sharing, and spending. This pairs with the importance of automated saving to excite them about growing wealth.
Once your child is over 13 years of age, they can transfer funds to a different savings product that pays more in interest. FDIC coverage is standard on all accounts.
Minimum deposit requirement: $25
Account opening bonus: $0
Yield: 0.01 percent interest
Maintenance fees: None
6. Wells Fargo Clear Access Banking
Wells Fargo Clear Access Banking is another kid’s bank account that’s worthy of consideration. It is specifically for teens aged 13 to 17. If your child is 16 or younger, Wells Fargo requires an adult co-owner.
The account provides a debit card for kids plus a wealth of budgeting and educational resources for kids and parents alike. Parents can restrict spending if they wish and receive notifications of spending.
*Related: Read our guide on how to make a budget if you’re new to budgeting and want to help your child manage their money.
Like PNC Bank, your child can move the account to other Wells Fargo accounts as they get older. FDIC coverage is standard on all accounts.
If you want a bank account that grows with your child, Wells Fargo Clear Access Banking is a wise choice.
Minimum deposit requirement: $25 to open, but no ongoing requirement
Account opening bonus: $0
Yield: None
Maintenance fees: None, but $2.50 for non-Wells Fargo ATM withdrawals
7. Chase First Banking
Chase First Banking works as the name implies. It’s for children ages six to 17 and gives minor account owners a way to learn about the basics of money management.
This is especially helpful if they’re earning money as a teenager and want to put their funds in a bank account.
The account is joint with your child and allows you to digitally manage finances. You can oversee allowances and spending.
Like other banks, you can monitor spending and limit how much can be withdrawn at an ATM. Your child can access cash at over 16,000 ATMs fee-free.
The company also provides a wide array of educational tools for your child to sharpen their financial knowledge.
Chase First Banking is a solid choice for parents wanting to start teaching their children about money at a young age.
Minimum deposit requirement: $25
Account opening bonus: $0
Yield: None
Maintenance fees: None
Joint vs. Custodial Accounts for Minor Children
If you’re researching how to open a bank account for a minor, you’ve likely come across joint and custodial accounts as two top choices. Here’s how they differ.
Joint Accounts
Joint accounts work like they sound. They are an account you and your child hold equally. You can both make transactions on the account.
This will likely pose no problem when your child is younger as you’re the sole provider of income for the account. As they age, they may have more of an impact on the account.
Tools like spending notifications and limits can help manage this transition. If you and your child can work together, this shouldn’t present a problem.
A joint account is best if you want to work together to manage day-to-day spending and activity on the account.
Custodial Accounts
In most situations, savings for kids involves a custodial account. These can either be a Uniform Gifts to Minors Act (UGMA) or a Uniform Transfers to Minors Act (UTMA).
You open a custodial account for the sole purpose of benefiting the minor child. A UGMA or UTMA is often found at brokerages, but you can also open them with banks.
Minor children can’t access funds until they reach 18 or 19 years of age, depending on their state of residence. When the child reaches the age of majority, they move the funds into an account they own.
As custodian of the account, you can withdraw money from the account. However, it must be to benefit the child. Custodial accounts are not suitable for daily or short-term spending but are for long-term savings goals.
Common Questions About Minor-Friendly Bank Accounts
Do you want to open a bank account for your child? Here are common questions many parents have before choosing an account.
Which savings account is best for a child?
Choosing a kid’s bank account may seem overwhelming since there are many choices. While interest rates are important, you also want to avoid any bank that charges fees as that will erode savings.
Additionally, you want to choose a bank that provides various tools to help your child learn about money. Copper and PNC are two terrific choices on our list.
Are children’s savings accounts tax-free?
It depends. Before a child turns 14, the first $950 in UGMA and UTMA income is exempt. After turning 14, the tax rate can be as low as ten percent on interest income.
If it’s a joint account, you may be the one taxed. It’s best to consult a tax professional if you have any questions.
Can a parent take money out of a child’s bank account?
A parent can take money out of a custodial account, but it must legally be for the benefit of the child. If it’s a joint account, it’s best to discuss it as parent and child to ensure understanding by both parties.
Can a child’s savings account be garnished?
A child’s savings account typically can’t be garnished. State laws dictate whether custodial accounts can be garnished, but it depends on how the account is established.
It’s best to consult a lawyer or tax professional if you have questions about the garnishment of a bank account.
Can a child own a bank account?
No, a child is legally unable to own a bank account. As the parent or guardian, you will be the responsible party.
However, you can open an account for your child and allow them to take ownership of funds when they are legally able.
Bottom Line
Opening a bank account for kids under age 18 is a fun and tangible way for children to learn how to manage money. It may seem scary, but real-life experience is often the best way to learn basic skills especially if a child is working to earn money for the first time.
Many banks offer bank accounts for minors. Pick one that has no fees and plenty of tools to help your child grow their financial muscle.
When do you think it’s appropriate to begin to teach your child about money. What do you look for in a bank account?
I’m John Schmoll, a former stockbroker, MBA-grad, published finance writer, and founder of Frugal Rules.
As a veteran of the financial services industry, I’ve worked as a mutual fund administrator, banker, and stockbroker and was Series 7 and 63-licensed, but I left all that behind in 2012 to help people learn how to manage their money.
My goal is to help you gain the knowledge you need to become financially independent with personally-tested financial tools and money-saving solutions.
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