Best Savings Accounts to Help Teach Children Financial Responsibility

One of the greatest gifts we can give a child is to teach them financial responsibility at a young age. And a savings account for children can go a long way in this effort. As my wife and I raise our two kids, now both teenagers, we can see just how important it is that kids understand basic money management skills.

The right type of online savings account for a child can help teach children several important financial lessons:

  • The Power of Compound Interest: While perhaps urban legend, Einstein is said to have quipped, “The most powerful force in the universe is compound interest.” Watching a savings account grow through compound interest can help teach a child the importance and benefits of saving and investing at an early age.
  • Setting and Achieving Goals: Setting goals helps us think well beyond the moment. Financially speaking, consistent goal setting can help anybody achieve a greater level of financial freedom and wealth.
  • The Importance of Saving: Instilling in our children the habit of saving money can help them avoid a lot of grief later in life. Teach a child this lesson early in life, and they are far more likely to maintain the habit of saving when they are older.

Best Savings Accounts for Children

So let’s turn to some of the best savings accounts for kids. When we compiled this list, we considered several factors:

  • Interest Rate: A high interest savings account can help a child understand the importance of finding the best deals. While the interest rate isn’t the only consideration, it’s obviously an important one.
  • Low Fees: With many bank accounts for kids, the amount of money saved will be relatively small, at least to start. The last thing you want are fees eating away at the balance.
  • Low Minimum Balance: Some banks either require a substantial minimum balance or charge extra fees if a certain balance is not maintained. Unless your child’s bank account will exceed these minimums, it’s best to avoid these accounts.
  • Fun: Yes, a bank account can be fun. And particularly for young children, the fun factor can go a long way in teaching kids about money.

With these criteria in mind, here are our top choices for the best child savings accounts:

Capital One 360 Kid’s Savings Account: Formerly ING Direct, this savings account is specifically designed to teach children the habit of saving. The account pays a very competitive interest rate and doesn’t charge any fees. Children can check their balances to watch their money grow.

Capital One 360 Money: This account is ideal for teenagers. Both of my children have Money Accounts, which act kind of like a checking account, but without checks. They get a free debit card and the balance earns interest. There are no monthly maintenance fees, and I can monitor their spending. It’s a great way for teens to avoid carrying cash and to see where they are spending their money. Many times we have to show our daughter just where all her money went, and it’s easy with this account. And when they are ready, they can convert the Money account into a checking account.

Ally Bank: Finally, we include Ally Bank in our list for several reasons. First, it has no minimums and no monthly fees. Seconds, it offers extremely competitive interest rates. And finally, it has a wide selection of savings products. In addition to a simple online savings account, Ally Bank offers a variety of certificates of deposit, including a raise your rate CD and a no-penalty CD. As a result, Ally Bank is a great choice for older children, and could certainly become their bank of choice when they move out of the house.

The above are online banking options for children. Of course, you can always choose a local bank, and many offer special programs for kids. The downside is that interest rates usually aren’t as high as they are with online banks. Whatever you choose, the key is to make savings fun and consistent. And depending on the age of your child, consider involving them in choosing the bank.

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Published or Updated: November 17, 2015
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.


  1. Mesa AZ CPA says:

    The key is to just get kids started early. Too often we all fail to plan and don’t take advantage of compound interest. Even if it’s just $10, get started saving now.

  2. Adam says:

    Hi DoughRoller I just wanted to ask the web if there was such thing as a children bank account and a plastic card that connects to a children’s bank account that has money in it so that is all Love,Adam.

  3. DR says:

    Adam, most bank accounts offer a debit or ATM card. For minors, however, an adult will have to be on the account, too. There are also prepaid cards designed for teenagers. Good luck.

  4. Cody says:

    I just signed up for Dough Roller and I am learning alot. My parents did not teach me alot about credit or managing money when I was young. I don’t want to make that mistake with my 3 year old. How old does my daughter have to be to open an account?

  5. Jill merriam says:

    I have a 7 yr old. We are excellent bank of america customers. We went into one branch and they said they would waive the fees for our kids. Went into another branch to set it up and they flat out refused. They are willing to loose our business over a dew dollars a month. Oh well. Thxs. Jill

  6. Lakshmitha krishnan says:

    Iam a 16 year old and so i wish to open a bank account which also offer ATM card……..

  7. maaz says:

    i want to make an account

  8. Mit says:

    Ally requires ATM card users to be 18yrs or older, so its really not an option.
    Custodial account holders do not get ATM cards and joint account holders must be ≥18.

  9. Jackie says:

    I have to say that the best thing I ever did for my teen aged daughter is to get her her own paypal student account. She has her very own debit card that she can use anywhere. It’s linked directly to my account so I’m able to send her money on the fly, I’m able to view all of her purchases, and best of all there are no fees and there is no chance of her spending more money than she has available. I’ve been able to teach her financial responsibility and at the same time been able to control her spending if needed. I would HIGHLY recommend paypal over any other pre-paid accounts!

  10. It is high time that we teach our children the basics of financial management at an early age.It is going to be really easy with these accounts.You rightly said that it shall be more like a fun along with some learning.
    Important thing is that parents should always be there to supervise them as children accounts can be ‘double edged sword’ too.Thanks for sharing Rob!

  11. Ginny says:

    i have a 9 y/o who i would like to set up so that he has a debit card. i will be on the account with him. any ideas which bank can accommodate us?

    • Rob Berger says:

      Ginny, I like the Capital One 360 Money Card. It will have some limitations for a 9 year old, but it works great. Our two children have used the card since they were in high school.

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