Should You Start a Savings Account for Your Child?

Why a Kids’ Savings Account is a Smart Move 

While there’s no shortage of books, apps, and games that teach kids about moneyteach kids about money, one of the simplest and most effective ways to help them learn is by opening a savings account.

There’s no minimum age to start, and even small, regular deposits can add up over time. Whether you want to help your child build smart money habits or give them a financial head start, a savings account can be a valuable tool. 

And here’s the cool part—kids today are already thinking about their financial future. An Acorns survey found that 41% of Generation Alpha (kids ages 6-14) are saving for big goals like college, a house, or even retirement. Yep, retirement! They’re picking up money lessons from parents, school, and even social media. Opening a savings account now gives your child a hands-on way to manage money, set goals, and feel proud of their progress—no matter how small their deposits might be.  

The Benefits of a Savings Account for Kids 

1. Encourages a Savings Mindset 

Does your child love spending their allowance the moment they get it? Whether it’s a new Lego set or video game console, the temptation to splurge is real. A savings account introduces the concept of delayed gratification—teaching kids that saving money over time allows them to reach bigger goals. 

For example, if a child deposits just $10 per week, they’ll save $520 in a year—and that’s before interest kicks in. Seeing their balance grow fosters a sense of accomplishment and helps them understand that good things come to those who wait. 

2. Builds Financial Knowledge 

Many adults wish they had learned more about moneylearned more about money as kids. A savings account gives children hands-on experience managing their finances and introduces key financial concepts, including: 

• Making deposits and withdrawals: They’ll learn how to put money in and take money out responsibly. 
• Tracking account balances: Keeping an eye on their savings helps them understand cash flow. 
• Understanding interest and compound growth: Watching their money grow with interest teaches them about the power of saving early. 

As they get older, transitioning from a savings account to a checking account can help them practice budgeting, debit card use and responsible spending. 

3. Boosts Confidence with Money 

Handling their own savings builds confidence. When kids have control over their money, they gain a sense of independence and responsibility. Watching their balance grow gives them a sense of pride, reinforcing good financial habits. 

Many banks even offer kid-friendly online dashboards where children can log in and check their savings progress. This real-time visibility keeps them engaged and motivated to save more. 

4. Helps Them Plan for the Future 

A kids’ savings account is more than just a place to stash money—it’s a tool for goal setting. Whether they’re saving for a big purchase, a school trip, or even their first car, having a dedicated account helps them stay focused and committed. 

This is also a great opportunity to introduce long-term savings goals like college savings or investing. While they may not need to think about retirement yet, teaching them early about setting aside money for the future is a valuable lesson. 

Types of Savings Accounts for Kids

Not all savings accounts are the same! Depending on your child’s age and financial goals, here are a few options to consider:  

• Traditional Savings Accounts: Low minimum balances and a fixed interest rate make these great starter accounts. 
• High-Yield Savings Accounts: Offer higher interest rates, helping savings grow faster, though they may require a higher minimum balance. 
• Custodial Accounts: Managed by a parent or guardian until the child reaches a certain age—ideal for long-term goals like college savings. 
• Joint Accounts: Both you and your child have access, allowing you to monitor their activity and guide them as they learn. 

What to Look for in a Kids’ Savings Account 

When choosing the right account, keep these features in mind: 

• Competitive Interest Rate: Higher interest means faster growth. 
• Low or No Fees: Avoid accounts with unnecessary fees that eat into savings. 
• No High Minimum Balance: Some accounts require a minimum deposit—look for one that fits your budget. 
• Online & Mobile Access: Digital banking tools make managing money easier for both you and your child. 
• Financial Education Resources: Some banks and credit unions offer budgeting tools and savings challenges to help kids learn. 
• Joint Account Option: If you want to guide your child’s savings, a joint account gives you oversight while allowing them some independence. 

How to Open a Savings Account for Your Child 

Ready to open an account? Here’s what you’ll need: 

• Your ID (passport, driver’s license, or other official identification) 
• Your child’s birthdate and Social Security number 
• A minimum deposit (some banks require $25–$100 to start—check in advance!)

Many banks allow you to apply online or in person at a local branch. Before finalizing your choice, compare different accounts to find the best interest rates, lowest fees, and most user-friendly tools for kids.