Best Interest Rate: Citizens Bank Platinum Plus Money Market
While it's not specifically designed for kids, the Citizens Bank Platinum Plus Money Market offered by Citizens Bank carries one of the highest interest rates we've found at any bank. The account earns 0.05% APY and requires no monthly fees or minimum balance level, making it a low-maintenance growth option for your child's college fund. Investing your money offers stronger potential returns, but the Citizens Bank Platinum Plus Money Market represents your best option among risk-free deposit accounts.
Citizens Bank is an international financial institution, which means that its online banking tools are well-designed and up-to-date. Since the bank doesn't offer any type of online checking account, it enables customers to link the Dollar Savings Account account to any checking account you use to make the first deposit. From there, you can establish free automatic transfers in order to grow your child's savings each month. This isn't the most convenient arrangement, but you're unlikely to find a better deposit rate at any other bank.
Best for a Baby: M&T MyChoice Money Market
M&T Bank offers the biggest long-term bonus for a child savings account, but earning the extra amount requires a long period of continuous saving. The M&T MyChoice Money Market Account is available for any child under 12 years old, and comes with a $1,000 bonus if you manage to make a deposit every month until your child's 18th birthday. The minimum monthly deposit is $25 if you open the account for your child before age 6, but goes up to a $50 monthly deposit if you open it when your child is between 6 and 12. In addition, you're allowed to miss one monthly deposit each calendar year without giving up the bonus.
|Age to Open||below 12 years old|
|18th Birthday Bonus||$1,000 with interest, retroactive to account opening|
|Bonus Requirement||$25 or $50 monthly deposit|
|Minimum to Open||$25 if under 6 years old; $500 if between 6 and 12|
Assuming your child earns the bonus with minimum deposits every month for 18 full years, the bonus and your interest earnings bring the annual rate to 1.06%. At the current APY, you'd earn $24.49 in interest on a deposited total of $5,400. Then, the bonus and its retroactive interest would add $1,009.04, for a grand total of $6,433.53. To achieve maximum efficiency with this account, you should open it as soon as your baby is born and commit to the minimum required monthly deposit for the next 18 years.
The account's low APY of 0.34% means that you shouldn't commit more than the minimum required to earn the bonus. You could make things even more efficient by taking advantage of the one monthly deposit you're allowed to miss each year—but that kind of fine-tuning risks losing the entire bonus if you forget to resume making deposits the next month. So long as you set up automatic deposits, M&T MyChoice Money Market provides a great incentive to make a steady contribution towards your baby's future.
Best for Teens: Frost Money Market
The Frost Money Market Account offers a great combination of high interest rate and educational features that give teens a chance to practice actual money management. This account not only carries an interest rate of 0.30% APY, it also gives your child an online account for checking the balance, making deposits and tracking their expenses. And since an adult is required to act as the joint account-holder, the account also strikes a balance between independent learning and parent supervision.
Both you and your teen will be able to manage the account through Frost Bank's convenient mobile banking app. In addition, Frost Bank also operates hundreds of branches, supplementing the online experience if you prefer brick-and-mortar banking. Even if your family is located outside of the bank's physical footprint, accounts can be opened from anywhere as long as you're willing to manage your money through the bank's website and mobile banking app.
Best Teaching Tools: PNC S is for Savings
Among traditional banks, the PNC S is for Savings account goes the farthest in providing tools to teach your child about managing money. Though the interest rate is just 0.01% APY, parents who emphasize learning by doing will appreciate the variety of activity-based features on PNC's child-oriented account. Kids learn how to divide their savings towards customized goals through a drag-and-drop feature, and the engaging use of Sesame Street characters provides just one more feature you probably won't find at other banks. All of these options make the PNC S is for Savings Account best-suited to younger children.
However, we recommend that you supplement this account with a stronger interest-earning option. 0.01% APY is the lowest possible rate that a bank can put on any type of deposit account, and it would be inefficient to keep the bulk of your child's savings at PNC just for the child-friendly features. With no monthly service charge for children under 18, it's certainly possible to keep the account at a low balance and use it just for teaching. If you already bank with PNC yourself, then managing automatic deposits to this account becomes even easier.
Best Credit Union Account for Kids: Amboy Direct Money Market Max More
If you're willing to try a credit union instead of a bank, the Amboy Direct Money Market Max More gives you one good reason to sign on. The 0.25% APY you can earn on balances of at least $5,000.00 beats any rate you'll be able to find at a brick-and-mortar bank. We also recommend Amboy Direct over other credit unions because it's both larger and easier to join: while many credit unions restrict membership based on profession or region, Amboy Direct has a strong online presence and allows anyone to join following a $0.00 donation to one of their associated nonprofit organizations.
You'll need to open this account on or before your child's 12th birthday, and sign yourself up as the co-owner of the account. Amboy Direct provides the initial $5 deposit required to open the account, which can then be used like any regular savings account to help teach your child about saving. Children age 13 and older can also benefit from an Alliant Free Teen Checking Account, which automatically links to the savings account. This gives your child the chance to start practicing with both a checking and a savings balance.
Summary of the Best Kids Savings Accounts
We've provided a comparison of the different savings accounts in this article to help you pick between them based on their rates and features.
|Best Interest Rate||Citizens Bank Platinum Plus Money Market||0.05%||Highest online savings APY available|
|Best for Babies||M&T MyChoice Money Market||0.34%||$1,000 bonus on 18th birthday|
|Best for Teens||Frost Money Market||0.30%||Joint account with parent and learning features|
|Best Teaching Tools||PNC S is for Savings||0.01%||Kid-friendly learning features|
|Best Credit Union Savings for Kids||Amboy Direct Money Market Max More||0.25%||Best credit union for kids savings|
Finding the Right Savings Account for Your Child
Ideally, the savings account you choose for your child will have both a strong interest rate and a way to get him or her involved directly in managing the account. Realistically, it won't be easy to find a bank that delivers both in the same package. Instead, you should either choose one of the two features or search for two accounts that each specialize in a different area. For instance, you might want to find a high-yield savings option online, then supplement it with a more practical brick-and-mortar experience from a bank that actually operates in your area.
On the other hand, if you feel that it's more helpful to teach your child using websites and online banking tools, it might be a better option to skip the brick-and-mortar account altogether. Since banking seems to be increasingly focused around electronic and mobile platforms, it makes sense to prepare your child for the methods that many banks will favor as they grow older.