Best Banks for Child Savings Account – August 2023
Best Banks for Child Savings Account - August 2023
Teaching Kids to Manage Money: The Best Children’s Savings Accounts
When it comes to teaching children about financial responsibility, opening a kid’s savings account is a great place to start. These accounts provide an opportunity for children to learn about saving, budgeting, and managing their money in a safe and controlled environment.
At Personal Finance Insider, we have researched and evaluated the best savings accounts for children, taking into consideration factors such as minimal bank fees and unique perks. Our top picks do not require a minimum opening deposit or monthly service fees, and they offer additional advantages like solid interest rates or debit cards to help manage the account effectively.
The Best Children’s Savings Accounts
Here are our top picks for the best children’s savings accounts:
- Chase First Banking℠ Account: Best Brick-and-Mortar Bank
- Capital One 360 Kids Savings Account: Best Online Bank
- Alliant Credit Union Kids Savings Account: Best Credit Union
All the financial institutions on our list are protected by FDIC or NCUA insurance, ensuring the safety of your child’s funds. While First Republic Bank has recently been shut down, it’s important to note that your money is safe at a federally insured financial institution, with up to $250,000 per depositor secured in a bank account.
Choosing the Right Bank: Expert Insights
To help you make an informed decision about which bank is the right fit for your child, we gathered insights from banking and financial planning experts. Here’s what they had to say:
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Tania Brown, certified financial planner at SaverLife:
“Before choosing a bank, ensure that it is FDIC insured. Additionally, consider your banking preferences. Do you prefer walking into a bank or do you prefer online banking? Do you write checks? These factors will help you determine which bank aligns with your needs and preferences.”
Sophia Acevedo, certified educator in personal finance, banking reporter, Personal Finance Insider:
“Create a list of your priorities in a bank account. Check if there are monthly service fees and if there are ways to waive them. For interest-earning accounts, compare the interest rates with the national average.”
Mykail James, MBA, certified financial education instructor, BoujieBudgets.com:
“Consider the accessibility of the bank. Are there branches nearby? Can you easily access your money when you’re out of town?”
Roger Ma, certified financial planner with lifelaidout® and author of “Work Your Money, Not Your Life”:
“Pay attention to the transfer process and how easy it is to move money in and out of the account. Also, assess the ability to link a brick-and-mortar checking account to a high-yield online savings account.”
These insights highlight the importance of considering factors such as insurance coverage, banking preferences, accessibility, and ease of use when choosing the right bank for your child’s savings account.
What Makes a Savings Account Good?
When evaluating the quality of a savings account, it’s essential to consider both accessibility and ease of use. While online savings accounts may offer higher interest rates, it’s important that withdrawing money when needed does not require excessive effort or have substantial friction.
At Personal Finance Insider, our goal is to provide you with options that suit your individual preferences. We thoroughly researched various financial institutions, evaluating different account features and bank services to find the standout options. For brick-and-mortar banks, we looked for accounts with minimal fees and wide accessibility. Online banks and credit unions had to demonstrate easy account opening processes, high-interest rates, and minimal fees.
Best Brick-and-Mortar Bank: Chase First Banking℠ Account
The Chase First Banking℠ Account stands out as the best brick-and-mortar bank option. This account does not require a minimum opening deposit or charge monthly service fees. It offers useful management features for both kids and parents, including savings goal tracking and mobile app alerts. Chase’s extensive network of more than 4,700 branches and 16,000 ATMs across the United States is an added advantage.
It’s important to note that the account charges out-of-network ATM fees if a Chase ATM is not used. Additionally, the account does not earn interest, making it more suitable for money management purposes rather than long-term savings goals. Opening this account requires parents to already have a Chase checking account.
Best Online Bank: Capital One 360 Kids Savings Account
The Capital One 360 Kids Savings Account is our top pick for the best online bank option. This account embodies the strengths of online banks, offering no monthly service fees, competitive interest rates, and 24/7 live chat customer support. It provides a convenient and user-friendly banking experience, free from standard bank fees.
However, the availability of Capital One branches may vary based on your location, potentially affecting cash deposit options. The bank primarily operates in Connecticut, Delaware, Louisiana, Maryland, New Jersey, New York, Texas, Virginia, and Washington DC.
Best Credit Union: Alliant Credit Union Kids Savings Account
The Alliant Credit Union Kids Savings Account stands out as the best credit union option. It offers a high-interest rate for daily balances of at least $100 and provides an ATM card, allowing easy account balance review and transactions at Alliant ATMs.
Opening an account at a credit union typically requires specific membership requirements. However, Alliant allows individuals to join online from anywhere in the US by donating $5 to Foster Care to Success.
Other Considerations
While our top picks excel in various areas, there are other financial institutions worth considering if their features align better with your preferences. Institutions such as Bank of America, Wells Fargo, US Bank, and others offer children’s savings accounts with their own unique advantages and disadvantages.
It’s important to research each institution thoroughly and consider factors such as monthly service fees, interest rates, and branch locations before making a decision.
Bank Trustworthiness and BBB Ratings
We understand the importance of trust and reliability when it comes to banking. To assess the credibility of the banks we recommend, we considered the Better Business Bureau (BBB) ratings. It evaluates businesses based on factors such as responses to customer complaints, honesty in advertising, and transparency in business practices.
Chase, one of our top picks, has been involved in public controversies in recent times, including settlements related to wrongful trading and underpayment of women. While these instances may affect its BBB rating, it’s worth noting that all the banks we recommend are FDIC or NCUA insured, ensuring the security of your child’s funds.
In conclusion, choosing the best children’s savings account requires careful consideration of factors such as fees, interest rates, accessibility, and ease of use. Our top picks, including the Chase First Banking℠ Account, Capital One 360 Kids Savings Account, and Alliant Credit Union Kids Savings Account, offer excellent options for teaching your child about financial responsibility. However, it’s important to explore additional institutions and research their features before making a final decision that suits your specific needs.
