How to Open a Children’s Savings Account

Nothing can be more intimidating than heading to the bank with your child to deposit their first check. However, teaching your children the value and fundamentals of saving is a skill that will prove beneficial as they grow into adulthood. Starting at an early age is perhaps the best way to instill the importance of paying yourself first, as well as the value of time when it comes to personal finance.

Selecting the right type of children’s savings account though can be a minefield. Not only is convenience important when it comes to personal banking but the terms and conditions of bank accounts are both things that must be considered. Hopefully with some of the tips below you will be well on your way to teaching your child the value of personal finance.


Hopefully saving will become a new hobby for your child once they see how fast their money can grow. Although it is ultimately up to the parent as to how many times you take your child to the bank, proximity and convenience are still huge factors when it comes to choosing the right account.

Check your route home: perhaps there is already a bank in the grocery store that you frequent or maybe one on the way home from your child’s school that you can use. If you are in the practice of visiting your personal bank, the easiest thing may be to open an account at your personal branch.

However, don’t open an account at your own bank so that you can switch money between your child’s account and your own account. Children’s accounts have special rules and you will not be able to move money automatically from accounts in different ownership.

Fees & Requirements:

In the quest to teach your child about personal finance, fees and fine print are definitely things that you should include in the educational process. The last thing you want is for your child’s hard earned money to be eaten up by fees. Watch out for banks that charge fees if there is no monthly direct deposit or a minimum balance is not maintained. There are a number of other ways that banks have started taking fees so reading the fine print is definitely advised.

Type of Bank:

If your personal bank does not meet the needs for your child’s new bank account, a good new option that is popping up everywhere is the local credit union. Credit unions are member owned so fees are typically lower and the fine print is often less egregious. Other options such as online banks and mobile deposit are also available instead of the old fashioned brick and mortar banks that you may have used when you were a child.

Programs for Children:

Many banks will have special programs or accounts for children. Depending on the age of your child you may need to set up a custodial account. A custodial account is an account which is in your name as custodian and also has your child’s name attached to the account. As custodian, you are responsible for your child’s account. Letting the bank know exactly what the account will be used for will help you find the account that is best suited for you and your child’s needs. Depending on the bank, they may even offer special programs such as going behind the counter of the bank or seeing the vault where the safety deposit boxes are.

Interest Rates:

Perhaps the most important thing to be remembered when opening any account is to consider what kind of interest rate you are receiving. Teaching your child the power of compounding is much easier done when the interest rate is something nominal.

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Author: Average Joe

A 16 year veteran of the financial planning and financial media circus. Lover of hamburgers and ice cream.

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  1. Great information. I think it is wise to open a savings account for your child and help them learn early about saving money.

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