The Seacoast BankNote

Opening A Savings Account for a Minor: Baby, Child & Grandchildren

As a parent, you want to see your child excel in all areas of life. One way to help with this is to teach them about financial literacy, and opening a savings account for your child is a great way to accomplish this. Experts agree that financial literacy starts at home. One of the best ways to teach your child about finances is to provide a real-world learning experience. Opening a kids savings account can help teach your child about basic money management skills and promotes positive financial habits.


Children counting their savings

In addition to financial literacy there are other benefits for opening a savings account for children which include teaching your child:

  • About the value of money
  • Staying focused on goals and saving for items they want but can’t afford
  • How to plan ahead
  • Math and how money can grow with compound interest
  • How a bank account works

Understandably, as a parent or guardian, you may have some questions about how to open a savings account for your child. However, even before making inquiries, it’s important to determine your purpose for opening a savings account. Some examples of purposes include:

  • Savings for college or a future goal
  • Providing allowances or accessibility to money
  • Safeguarding monetary gifts
  • Creating a trust fund for your child’s future

Providing clarity beforehand will help you ask financial institutions the right questions.

Advantages to Opening a Savings Account for a Minor: Baby, Child, or Grandchild

Opening a savings account also comes with several advantages. Below we will discuss three major advantages to opening a savings account.


Gone are the days of hiding money in a mattress. Instead, depositing money into a savings account can be a safer alternative as deposited funds are typically FDIC insured. If not deposited in a secure account, unforeseen variables may put your child’s savings at risk. For example, in the event of a fire, flood, or theft at your home where your savings may be placed, depositing the funds into a savings account can help ensure safety.

Future Investment

Every sound financial strategist knows that the value of long-term investments depends largely on time and the investment's ability to mature. Amongst many other economic factors starting a savings account for your child in their early years provides a greater wealth-building opportunity.

Financial Literacy

Apart from security and investments, starting a savings account for your child is an excellent step towards building accountability. A savings account provides an opportunity to educate your child and help them build a storehouse of financial literacy that will serve them well in their adult years. After all, most experts agree, money smarts always start at home.

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How to Choose a Bank and What to Consider For Your Child’s Account

Now that you understand the value of opening a savings account for your child. Let's explore the different factors you should consider before committing to a specific financial institution.

Location of the bank

While we live in a digital age traditional brick and mortar facilities are often ideal. Especially when attempting to provide actual money management experiences for a child. The prospect of walking into a bank and understanding how the process works provide a learning opportunity that most online banks are unable to provide to the child.

Children's financial literacy programs

Many banks, especially those in local areas are developing programs aimed towards teaching financial literacy. An example of financial literacy programs can be as simple as a financial game or quest offered by the bank via an online portal. Alternatively, entire programs can be developed to nurture financial literacy.

Minimum balance

Typically, many banks have zero balance or low minimum savings account options for children. However, it’s always important to ask these questions beforehand as every institution provides different offerings. More importantly, ask the representative to list different features associated with all available savings account types. Once you are fully aware of all the options available to you, make a decision based on the objective of your account.

For example, you may be considering saving money for college. Consequently, if a bank’s education-only savings account has a higher minimum balance requirement and a higher annual yield it may be more advantageous to select this option as opposed to the zero-balance savings account option. 

Ease of use

We live in a digital age! Many institutions provide feature-rich accounts. Which includes capabilities such as:

This type of ease of use is much more common these days.

Debit card availability

smiling girl with piggy bankIn some cases, you may want a debit card for the savings account. For example, the purpose of the account might be to provide a weekly allowance to your child which they can easily access. In such cases a debit card is ideal, so be sure to ask if one is available for the account type you are selecting. Keep in mind that debit cards for minors should include features such as controlled spending and fraud prevention. These features will help prevent the account from incurring overdrafts or help prevent fraud in case your child’s debit card is lost or stolen. 

Fund transfers

In many cases, parents or guardians choose to open savings accounts for their children at the same banking institution. If this is the case, confirm that your child's account will give a 'standing instructions' facility. This feature allows for a smooth transfer between your account to your child's account.

Money management

The discipline associated with keeping track of transactions is a great practice when teaching accountability and responsible money management. Some savings accounts may offer an app to track or observe deposits and withdrawals, especially if the account is going to be actively used by the child. If an app or program is unavailable, an alternative option is to simply create a printable log to keep track of the account’s activity.


Fees for a child’s savings account are usually smaller than their mature counterparts. Other fees to consider can include:

  • Penalty fees
    • Exceeding in bank withdrawal limits
    • Early withdrawal penalties
  • Inactivate account fees
  • Monthly maintenance fees
  • Technology/accessibility

In essence, you should have this information before choosing a savings account for your child and ensure that you are fine with it.

Interest rates & high-yield accounts

Seeing your money grow gives a very rewarding feeling; one that any parent will want their child to have. Compounding interest is one part of financial literacy that excites children as they can see the rewards of financial prudence.

Security of your funds

Make sure Federal Deposit Insurance Corporation (FDIC) insures the bank you pick. FDIC is an independent government agency handling the safety of banks and consumers. They will protect your child’s savings from losses should your bank become insolvent.

Spending limits

Another thing to consider is the daily spending limit allowed and the yearly limits for both spending and withdrawals. Keep in mind that every bank will have different policies or limits. So, it’s important to ask beforehand.

Customer service

When you have a problem or question, the last thing you want is to sit on hold for hours. Most banks have live support via Chat or call-back features in customer support service. Ask around to find out what banks make your friends happy. After all, referrals from someone you trust are always a great starting point.

Wrapping Up

Be sure to thoroughly consider the above-mentioned details before opening a savings account for your child. Odds are you probably have a particular bank in mind which means you’re already ahead of the game. However, after reading this article you’re certainly armed with the fundamentals to mindfully select the right savings account that is most advantageous for your child’s goals and future.

Ready to open a savings account for your child? Contact us to learn about our Minor Savings Account or connect with a local advisor.


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