Here’s What to Look for in a Kid’s Bank Account

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When choosing a bank account for your kids, there’s a few key features you want. Keep reading to learn what they are and why they’re important. 

Opening up a bank account for kids can be a great way to teach your children about money. They can develop the habit of saving so they are less likely to get into credit card debt. And they can learn about how to manage their account and keep track of their spending.

But you want this to be a positive experience, so it’s important to find the right bank account for your kids. Here are a few things to look for.

No monthly maintenance fees

Many banks charge monthly maintenance fees. While these can sometimes be avoided if you have a direct deposit put into your account or if you keep a certain amount of money in there, kids are probably not going to be able to do either of these things.

There is absolutely no reason you should pick a kid’s bank account that causes your child to lose money to the bank. Steer clear of any account that charges fees. In fact, you may want to go a step further than just looking at the fees for the children’s account and see what will happen when your kid ages out of eligibility for it. If the account converts to a normal one with fees, you may want to look elsewhere.

There are plenty of fee-free options out there — especially among online banks — so teach your kids how to look for a financial institution that won’t make them pay to do business.

Fee-free ATM access

Your children are probably going to want to take money out of their bank account at some point. When they do, they aren’t going to want to pay an ATM fee. So be sure you find a bank account for kids that allows them to use an ATM card and get money out where and when they need it.

That way, they won’t get discouraged by the banking system for trapping their money and making it costly and difficult to gain access to their own cash.

A generous APY

When you open a savings account for your kids, they can start to learn about interest — and can earn a little bit of interest income in the process. You’ll want to make sure you get an account with a high interest rate so your kids will be excited to see the rewards of savings. Some savings accounts for kids pay a substantially higher rate than others, so be sure to shop around and compare APYs carefully. There’s no reason to leave money on the table.

Financial literacy tools

Finally, consider looking for a bank that provides tools and education to help your child develop a better relationship with their money. This can include everything from financial education geared to kids to an easy-to-use mobile app or website that helps kids set and track their goals.

By taking the time to look for each of these features, you’ll be able to find the perfect account for your child. Just remember to also make sure it’s easy for you to monitor their bank account use and easy for you to move money over if needed, in case you want to give your kids a little extra help bulking up their bank account balance.

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