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How To Open A Savings Account For A Child

How To Open A Savings Account For A Child

A child savings account does more than store money—it's a hands-on tool that can shape your child's financial future.

Written by

January 15, 2026

Whether you’re stashing birthday cash, building an allowance habit, or setting up a “first money” system, the right account makes it easier to teach real-world money skills.

Several banks and financial institutions offer child savings accounts, and some of our best online banks even pay a high interest rate.

In this guide, you’ll learn what a child savings account is, how it differs from custodial and education accounts, and the exact steps to open one, plus tips for helping kids actually use it.

Key Insights

A child savings account is usually a joint savings account owned by a parent/guardian and the child, with the adult in control.
Child accounts often have low or no fees and built-in parental oversight, but rates may be lower than top high-yield savings accounts (HYSAs).
Other options include custodial (UGMA/UTMA) accounts and 529 education plans, which come with different rules and tradeoffs.

What Is a Child Savings Account?

A child savings account is a bank savings account opened for a minor, typically as a joint account with a parent or legal guardian. The adult usually controls transfers and withdrawals, while the child can often view balances and track progress.

Most child savings accounts at banks are joint accounts—meaning you and your child are joint owners of the account, but you (as the parent or guardian) maintain full control of the funds.

What Are Some Common Features of Child Savings Accounts?

Most kids' savings accounts include:

No (or low) monthly fees
No minimum balance to open
FDIC insurance (at FDIC-insured banks)
Digital access through an app/online banking
Parent controls (who can move money, when, and how)

Important: Interest rates on savings accounts are variable and can change at any time. Also, the rates aren’t usually as high as a regular high-yield savings account.

How A Child Savings Account Works

Who controls the account?

With many banks, the child is a co-owner, but the adult controls money movement (transfers/withdrawals), especially for younger kids. For example, Capital One notes that kids can check balances online, but transferring money typically requires adult access.

Can grandparents open one?

Sometimes. One example: Capital One states a grandparent can open a kids account if the child is at least 12 (otherwise the parent/guardian must be the adult co-owner). Rules vary by bank.

Other Types of Child Savings Accounts

In addition to joint bank accounts, you can open a custodial or educational savings account for your child. These accounts have different rules and limitations compared to a child bank account.

Custodial Account

A custodial account allows you (the parent or guardian) to open an investment account or bank account in the child’s name. The funds deposited into this account are considered a gift and legally become your child’s property. Adults manage it until the child reaches the age of majority (varies by state and account type).

This means you can no longer access the funds for yourself, but all money in a custodial account must be used directly for the child’s benefit.

Education Account

A 529 plan is designed for education savings. It can be used for qualified education expenses, and the rules can offer tax advantages depending on circumstances.

Also, federal rules now allow rolling over up to $35,000 (lifetime) from a 529 to a Roth IRA for the beneficiary under specific conditions (including an account age rule and annual Roth contribution limits).

Benefits of a Child Savings Account

According to Cornerstone Wealth Consulting Services LLC founder and CEO Jason P. Berube, a child's savings account is both straightforward and impactful in building their future success. Beyond just accumulating money, it teaches children essential early lessons about setting goals, observing their savings increase, and understanding the importance of future planning.

Here are a few advantages to having a child savings account:

Financial literacy: Kids learn what saving means and how money grows.
Motivation through visibility: Seeing the balance rise can be more powerful than a lecture.
Interest and growth potential: Even modest interest creates an intro to “money earning money."
Parental oversight: Adults can monitor activity and guide decisions.
FDIC insurance (at insured banks): Most kids' savings accounts offer FDIC insurance, which protects the money in the account up to $250,000 per depositor.

Steps to Open a Savings Account for a Child

Here’s how to open a savings account for your child:

Step 1: Pick the right account type

Start with the question: What is this money for?

Everyday saving + learning: Kids savings / joint savings
Gifts/investments that become the child’s at adulthood: UGMA/UTMA
Education-first goal: 529

Step 2: Compare banks (and look past the headline APY)

When comparing accounts, prioritize:

Fees: Monthly maintenance fees, minimum balance fees
Ease of use: App quality, transfers, automatic deposits
Parent controls: Limits on transfers, child login/view access
Access: Can you deposit checks easily? Can relatives contribute?
Rate competitiveness: Some adult HYSAs may pay more than child-branded accounts, but rates change often.

Example (rates move): As of early January 2026, Bankrate listed 3.30% APY for American Express National Bank HYSA and 3.60% APY for Barclays Online Savings.

Step 3: Gather the required documents

Banks commonly ask for:

Adult info: ID + SSN/Tax ID and basic personal details
Child info: name, DOB, and usually Social Security number
Proof of address may be required depending on the bank

Example: Capital One lists adult identity details and the child’s SSN as part of opening requirements.

Step 4: Apply online or in person

Many banks let you apply online in minutes. In-branch can be helpful if:

you’re opening multiple linked accounts,
you want to deposit cash immediately,
you need help with documentation.

Step 5: Fund the account

You can usually fund via:

External bank transfer (linking accounts)
Transfer from your checking account
Mobile check deposit (bank-dependent)

Step 6: Set up “autopilot” features

These make the account used, not just opened:

Automatic weekly/monthly transfers
Goal tracking (if available)
Alerts/notifications for deposits

Choosing the Right Savings Account for Your Child

To find the best savings account for your child, compare options from different financial institutions. Several high-yield savings accounts offer competitive rates with no monthly fees. When comparing accounts, consider:

Interest rates and fees: To maximize growth potential, look for high interest rates and no maintenance or overdraft fees. High-yield savings accounts typically offer better rates than traditional child savings accounts.
Minimum deposit requirements: Choose an account with no or low minimum balance requirements. Many online banks don't require minimum deposits.
Accessibility and withdrawal limits: Understand how to access funds (Zelle, ATM card, debit card) and check withdrawal restrictions. Some accounts limit monthly withdrawals—look for ones with fewer restrictions.
Additional perks: Some accounts offer educational tools, savings goal trackers, and other features through their mobile apps to help teach financial literacy.

Tips for Encouraging Your Child to Save

With a new savings account for your child, it’s important to encourage your kid to start putting money into it. Here are a few ways you can encourage them to save:

Set goals together: Kids are motivated by goals, so working with your child on a savings goal (such as a new video game or their first car) can help encourage them to save more.
Use visual tools: Visual examples can help your kids learn faster. Showing them a savings goal chart or a graph of how compound interest works will help them see the value of saving money consistently.
Reward savings milestones: Saving money can be boring, so it’s important to celebrate along the way. For example, giving people a new toy or gadget when they hit a savings milestone can motivate them to save.
Teach by example: Children learn by watching their parents' habits. When you actively save money and discuss your financial decisions, you show that saving is a priority and help instill these values in your child.

Final Takeaway: Start Saving Early

Opening a savings account for your child is one of the simplest ways to turn money lessons into money habits. Start by choosing the right account type (kids savings vs. custodial vs. 529), pick a low-fee option with good parent controls, and set up automatic deposits so the account grows without constant reminders.

Frequently Asked Questions

1. At what age can a child have a savings account?

You can open a joint savings account for your child from birth. For children under 12, most banks require a parent or guardian to be the joint account owner.

2. How much should I put into my child's savings account?

There's no set amount—you can deposit whatever works for your family. Many parents tie savings to chores or small jobs, helping children earn and save their own money.

3. Can the child withdraw money independently?

While children may receive an ATM card with their savings account, parents and guardians have control. You can restrict ATM card usage or freeze the entire account if needed.

4. Do I pay taxes on my child's savings account?

For joint accounts, you'll need to report any interest earned on your tax return. With custodial accounts, interest belongs to your child—they'll need to report it if it exceeds the unearned income limit ($2,600).

5. Does a child's savings account affect financial aid?

Yes, but most child savings accounts are joint accounts that count as parental assets, which is better for financial aid than custodial accounts that count as the child's assets.

Written byJacob Wade

Jacob Wade is a personal finance expert at BestMoney.com, focusing on banking products, loans, and financial apps. His work has been featured in Forbes Advisor, Investopedia, and Time. A former enrolled agent with CPA firm experience, Jacob also shares his knowledge of credit card rewards and travel hacking.