Kids Savings Accounts

Many banks and other financial institutions offer savings accounts for kids. These are simple passbook or statement accounts with low minimum balances. Here are a few things to look for when selecting a bank or credit union savings account.

Savings Accounts for Kids

You should be able to find an account that won't charge fees. Bank fees can wipe out a small savings account pretty quickly. All banks are going to charge fees in some cases. You need to review what these scenarios are and make sure they won't happen in your case. For example, some banks charge a fee if you exceed a certain number of withdrawals a month. If you don't plan to make many withdrawals, that's fine. Just make sure that the way you intend to use the account will not incur any bank fees. And be aware of what those pitfalls are so that you can avoid them.

Minimum Balance

A Kids Savings Account should have a low required opening balance. Twenty-five to fifty dollars is reasonable. After all, kids don't have a lot of money. They should be able to start a life long habit of saving on a small scale. Once you open the account, make sure that the balance never drops below the minimum, or it will start incurring penalties.

Online Access

Many people manage their bank accounts online, and certainly your children will do so when they grow up. This is a great way to teach your kids to use the computer as a tool, not just for games. It also helps them see that their money is growing if they can see their balance from time to time.

Interest

Savings accounts will not garner a great deal of interest, especially while the balance is small, as it will be for most kids. But the account should earn interest. Kids should see that if they deposit money into a savings account, their balance will grow and accumulate interest.