How Kids’ Savings Accounts Work-and What Parents Should Know

Kids can’t open bank accounts on their own, even though youth savings accounts are designed specifically for minors. A parent or guardian must be a joint owner, and these accounts often come with special rules and their own rates.

But here’s the surprise: A handful of banks and credit unions pay truly premium yields on youth accounts. In fact, the rates are considerably higher than what most parents can earn on their own savings accounts.

Key Takeaways

Kids are the biggest winners in today’s high-rate habitat, with select accounts paying an eye-popping 7% to 10% APY.
Spectra Credit Union tops the list at 10.38% APY, while Chevron and Spectrum Federal Credit Unions pay 7.00% APY-all available nationwide.
Kids living in certain parts of the country have even more options for earning an extraordinary rate-with top offers from five regional banks and credit unions.
Parents can’t earn quite that much, but our ranking of the best high-yield savings accounts gives you 15 options to earn 4.30% to 5.00% APY.

Best Youth Savings Accounts of November 2023

When it comes to teaching kids about saving, a high-yield savings account can be a powerful tool. Not only does it keep their money safe, but it also helps them understand the benefits of earning interest. Here are some of the best youth savings accounts available nationwide, and a look at options for those in specific locations.

Nationwide Options with Top Rates

Spectra Credit union and Spectrum/Chevron Federal Credit Union stood out for offering the very best youth savings account rates-both available nationwide.

Spectra Credit Union (10.38% APY): Spectra’s Brilliant Kids Savings account is available to children up until their 18th birthday,and it pays 10.38% APY on balances up to $1,000. Anyone in the U.S. can join Spectra Credit Union by agreeing to a free one-year membership in the nonprofit American Consumer Council.

spectrum Federal Credit Union / Chevron Federal Credit Union (7.00% APY): These two credit unions are separately branded but are the same institution. You can join one or the other (but not both) by agreeing to a free one-year membership to the nonprofit Financial Fitness Association. Their MySavings Youth Account pays 7.00% APY on balances up to $1,000 and is available to individuals who are 21 or younger. Those who are at least 13 may also request an ATM card.

Where Kids Can Earn Even More on Their Savings

Living in certain parts of the country unlocks more high-yield youth savings options. Some can be opened online, while others require an in-branch visit. In all cases, eligibility depends on your location.

Neighbors Credit union (10.00% APY): Through its SMART youth program, Neighbors offers different banking privileges for different ages.Anyone from birth through age 22 can earn 10.00% APY on up to $1,000 in a SMART savings account, and those aged 13 and older can open a checking account with a debit card. Membership in Neighbors Credit Union is open to those who live or work (or have“`html

High-Yield savings Accounts for Kids: A Guide for Parents

Want to teach your kids about saving money *and* help their funds grow faster? High-yield savings accounts (HYSAs) designed for children are a smart solution. These accounts offer significantly higher interest rates than conventional savings accounts, allowing your child’s money to work harder. Here’s what parents need to know.

Why Choose a High-Yield Savings Account for Your Child?

Traditional savings accounts at big banks typically offer minimal interest-often less than 0.50% Annual Percentage Yield (APY). A high-yield savings account, however, can offer rates of 4.00% APY or even higher. This means your child’s savings will grow much faster, simply by being in the account.For example,$1,000 saved at 0.01% APY earns just $0.10 in a year, while $1,000 saved at 4.00% APY earns $40.

Where to Find High-Yield savings Accounts for kids

Several financial institutions specialize in or offer high-yield savings accounts suitable for children. Here are a few options:

• Greenlight: Greenlight offers debit cards for kids and teens,along with a savings account that currently earns 1% APY. Thay also provide parental controls and financial literacy tools. learn more about Greenlight.
• Copper: Copper provides debit cards and a savings account with a competitive APY. It focuses on teaching kids financial obligation. Learn more about Copper.
• Step: Step offers a free spending account and a savings account with a high APY. it also includes features like budgeting tools and rewards. Learn more about Step.
• Capital One Kids Savings Account: Capital One offers a kids savings account with a competitive rate and no monthly fees. Learn more about Capital One Kids Savings.
• Credit Unions: Don’t overlook local credit unions! Many credit unions offer excellent rates on savings accounts, and your deposits are federally insured by the NCUA-the credit union equivalent of the FDIC. That means your deposits are protected up to $250,000, just like at a bank.

Smart Savings Options for parents,Too

Adults can’t snag 7% or 10% like kids can-but you can still earn historically high returns.Today’s top high-yield savings accounts pay up to 5.00% APY, and our daily ranking lists 14

Key Takeaways

• High-yield savings accounts offer significantly higher interest rates than traditional savings accounts.
• Several financial institutions offer HYSAs specifically designed for kids.
• Consider factors like fees, minimum balance requirements, and parental controls when choosing an account.
• Credit unions are a great option for federally insured,competitive rates