The Best Bank Accounts for Children
Opening a bank account for your child will teach him financial responsibility at an early age. It will help him learn to set and achieve financial goals and to see rewards for saving his money. Keep some criteria in mind when you start looking for the best bank account for your children.
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High-Interest Savings
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Involve your kids in the search for a bank that offers the best interest on a savings account so they understand the value of looking for the best deal. Finding a high-interest savings account for your children will help them see their money grow quickly, which will help motivate them to keep putting money in their account. ING Direct offers a 1 percent annual percentage yield for kids. Other banks, such as Union Bank, offer a reward program for deposits. Kids earn a stamp for every deposit of at least $5. Once they earn 10 stamps, they receive a gift certificate to a major retailer or restaurant as a reward.
Low Fees
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Since children will most likely have such a small amount in their savings or checking account, look for an account with low fees or no fees so they can maximize their money. Many banks with special accounts for children don't charge any monthly maintenance fees on those accounts. This prevents kids from losing any of the money they deposit. Union Bank, USAA and ING Direct are all examples of banks that don't charge any monthly fees for their youth accounts.
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Minimum Balance
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Find a youth account with a low minimum balance or no minimum at all. Some youth accounts require a $25 deposit to open the account, but won't penalize kids if their account goes below that amount. Some, such as Union Bank, which charges $1, require an even smaller minimum to open an account. Stay away from any accounts that charge a fee if the minimum amount dips too low.
Access
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It is important for children as well as parents to have access to the account. Many banks allow kids to access their account online or in person. This allows kids to check their balance and stay up to date from home. Some banks, such as USAA, allow youth to access their account from their mobile device with certain apps. Many banks require an adult to be present for a child to manage her account, but some allow parents to grant permission so children can manage the account on their own. Many banks also allow parents to link their account to their child's account if they are at the same bank. This allows parents to transfer money to the account.
Responsibility
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Let your child do most of the research and work when it comes to finding a savings or checking account and then managing his money. When you set up the account, depending on the age of your child, let him do most of the talking with the bank teller so he feels more involved in the decision. Make your child's name the main one on the account so all correspondence from the bank comes addressed to him.
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References
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