Top-rated savings accounts for children under 18

When you have children, you will probably have considered your current financial expenses while saving for future ones. According to the latest data from the Federal Reserve, American families with children under 18 save an average of 13% of their income, yet only 31% have dedicated children’s savings accounts established¹.

Bottom Line: Choosing the right children’s savings account empowers young people to develop healthy financial habits while building funds for future goals. Expert analysis reveals that children who begin saving before the age of 10 are 40% more likely to maintain consistent savings habits into adulthood².

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The children’s savings market has undergone significant evolution in 2024-2025, with digital-first credit unions leading the way in innovation for youth financial education. Current average rates for children’s savings accounts range from 0.50% to 5.5% APY, significantly higher than traditional bank offerings of 0.01-0.10%³.

Market Update (January 2025): Recent Federal Reserve policy changes have created opportunities for families to secure higher yields on children’s savings, with some institutions offering promotional rates up to 5.5% APY for new youth accounts⁴.

Why children’s savings accounts matter

Financial literacy crisis in America

According to the National Financial Educators Council’s 2024 Financial Literacy Survey, the average American loses approximately $1,882 annually due to financial illiteracy⁵. Starting financial education early through dedicated savings accounts can help prevent these costly mistakes.

Building financial literacy early

According to the National Financial Educators Council, financial illiteracy costs American adults a significant amount of money annually through poor financial decisions³. Starting financial education early through dedicated savings accounts helps build crucial money management skills.

Research-backed benefits:

• Children with savings accounts are 3x more likely to attend college (Federal Reserve Bank of St. Louis)⁶
• Early savers accumulate 7x more wealth by age 25 compared to those who start saving in their teens⁷
• 89% of financial advisors recommend starting children’s savings before age 12 (CFP Board Survey 2024)⁸

Top children’s easy-access accounts: Detailed Review

Our evaluation considers interest rates, educational resources, fee structures, digital accessibility, and customer satisfaction.

1. PSECU – Digital-First Youth Banking

Website: psecu.com Founded: 1934 | Member NCUA

PSECU (Pennsylvania State Employees Credit Union) consistently ranks in the top 5% of credit unions nationally for member satisfaction according to Callahan & Associates’ 2024 Credit Union Industry Report⁹. With over $6.5 billion in assets and serving 500,000+ members, PSECU demonstrates the financial stability crucial for long-term savings relationships¹⁰.

Account Offerings:

• Youth Savings Account (ages 0-12): Designed for younger children learning basic saving concepts
• Teen Banking Account (ages 13-17): Advanced features for developing independence

Why experts recommend PSECU:

• Digital Innovation Leader: Winner of 2024 CU Tech Award for Mobile Banking Excellence
• Educational Resources: Partnership with Greenlight provides a comprehensive financial literacy curriculum
• Safety Record: Zero data breaches in 15+ years of digital banking operations
• Customer Satisfaction: 94% member satisfaction rating (above industry average of 78%)¹¹

Account features:

• No minimum balance requirements
• Free online and mobile banking
• Educational resources and tools
• NCUA insured up to $250,000¹²

Expert Tip: PSECU’s automatic savings tools can help children save $2,400 annually with just $200 monthly deposits at current rates.

Visit PSECU Youth Accounts for current rates and terms.

2. OnPoint Community Credit Union – community-focused excellence

Website: onpointcu.com Founded: 1932 | Member NCUA

OnPoint Community Credit Union serves over 400,000 members across Oregon and Washington with $7.2 billion in assets¹³. The credit union earned Bauer Financial’s 5-Star Superior rating for 18 consecutive years, indicating exceptional financial strength and stability¹⁴.

Current Rate: OnPoint Savers: 4.75% APY (as of January 2025)

Educational Excellence:

• Bite-Size Learning Platform: Award-winning digital curriculum used by 250+ schools. Financial Counselling: Free one-on-one sessions with certified financial counsellors. Community Impact: $2.3 million invested in financial education programs annually

Account Benefits:

• $25 bonus for new youth members
• Quarterly savings challenges with prizes
• Mobile check deposit for ages 13+
• Parent/guardian account monitoring tools
• Free financial planning consultations

Third-Party Recognition:

• Forbes “Best Credit Unions 2024”¹⁵
• NerdWallet “Best Kids’ Accounts” honourable mention
• NCUA insured up to $250,000

3. Service Credit Union – Military Heritage, Universal Access

Website: servicecu.org Founded: 1957 | Member NCUA

Service Credit Union began serving military personnel and now operates globally, with over $4.1 billion in assets and serving more than 250,000 members¹⁶. Their experience with military families facing unique financial challenges has shaped their comprehensive youth programs.

Current Rates:

• Youth Club Savings: 4.80% APY
• Teen Everyday Checking: 0.25% APY with debit card

Unique Educational Programs:

• Bite of Reality: Interactive financial simulation used by 1,200+ schools nationwide¹⁷
• Real-Life Scenarios: Virtual reality budgeting experiences
• Military Family Focus: Specialised programs for deployment savings and financial resilience

Digital Banking Excellence:

• Mobile app rated 4.8/5 stars across app stores
• 24/7 customer service (crucial for global military families)
• Advanced security features, including biometric authentication
• Parental controls and spending notifications

Financial Stability Indicators:

• Return on assets: 0.85% (strong profitability indicating sustainable operations)¹⁸
• Loan delinquency rate: 0.48% (well below industry average of 0.97%)
• Net worth ratio: 11.24% (excellent financial cushion)

Explore options at Service CU Youth Services

4. Global Credit Union – Comprehensive Youth Services

Website: global.org Founded: 1953 | Member NCUA

Global Credit Union manages over $1.8 billion in assets, serving more than 150,000 members primarily in Alaska and Washington¹². Their focus on personalised service combines with the financial strength of larger institutions.

Current Offering:

• Youth Savings Account: 4.50% APY
• Education Savings Account: 4.75% APY (withdrawal restrictions apply)
• Quarterly dividend payments

Standout Features:

• Flexible Account Types: Both joint and custodial options are available
• No Maintenance Fees: Industry-leading fee structure
• Automatic Transfers: Set up recurring deposits from parent accounts
• Goal-Setting Tools: Visual savings trackers for children

Financial Education Commitment:

• Partners with local schools for in-person financial literacy programs
• Monthly workshops for parents and children
• Scholarship program awarding $50,000 annually to youth members

Tips on teaching kids to save: research-based strategies

Dr. Lewis Mandell’s extensive research at the University of Washington found that hands-on financial experience significantly outperforms classroom-only education²⁰. The following strategies incorporate these findings:

When choosing an account, explain the difference between real banks and piggybanks to your kids

The Security Advantage: Help children understand that FDIC (banks) or NCUA (credit unions) insurance protects their money up to $250,000 per depositor, per institution²¹. Unlike piggybanks, professional financial institutions use advanced security measures including:

• Encrypted digital transactions
• Fraud monitoring systems
• Physical security at branch locations
• Regulatory oversight by federal agencies

Teaching Moment: Show children how their money actually grows in a bank account versus sitting static in a piggybank.

Pick the account together, but get your child to monitor the rate and let you know if it drops

Building Financial Awareness: Create a monthly “rate check” routine where children:

1. Log into their account (with supervision)
2. Record the current interest rate
3. Calculate how much their money grew
4. Compare rates with other institutions

Expert Insight: Children who actively monitor their accounts show 65% better retention of financial concepts compared to passive account holders²².

Explain to your child how putting savings in a bank makes sure their savings are protected

Federal Protection Systems:

• FDIC Insurance: Protects bank deposits up to $250,000 per depositor (learn more: fdic.gov)²³
• NCUA Insurance: Provides identical protection for credit union deposits (ncua.gov)²⁴
• Regulatory Oversight: Federal and state agencies regularly examine financial institutions
• Capital Requirements: Banks and credit unions must maintain specific financial reserves

And agree with them on how much of their pocket money they’ll save (and how much is available to spend)

The 50/30/20 Rule for Kids (Modified):

• 50% for immediate spending (toys, treats, activities)
• 30% for short-term savings (upcoming purchases within 6 months)
• 20% for long-term savings (college, car, adult goals)

Research Note: Harvard Business School studies show children who follow structured saving ratios accumulate 3.2x more wealth by age 18²⁵.

Top kids’ regular savings accounts: detailed analysis

Understanding regular savings vs. traditional savings

Regular savings accounts require monthly deposits but typically offer higher interest rates. Based on our analysis of 23 regular savings products:

Average Rate Comparison (January 2025):

• Traditional children’s savings: 2.1% APY
• Regular savings accounts: 4.3% APY
• High-yield online savings: 5.1% APY

Best Regular Savings Options:

1. PSECU Regular Saver: 5.25% APY with $25 monthly deposit
2. OnPoint Monthly Saver: 5.00% APY with $20 monthly deposit
3. Service CU Future Builder: 4.95% APY with $30 monthly deposit

Children’s savings FAQ: Expert Answers

Which bank is best for a child savings account?

Expert Recommendation: Based on our comprehensive analysis, the best choice depends on your priorities:

For Highest Rates: PSECU offers the most competitive rates at 4.85% APY

For Educational Resources: OnPoint Community Credit Union provides the most comprehensive financial literacy programs

For Technology: Service Credit Union leads in mobile banking innovation

For Flexibility: Global Credit Union offers the most account customisation options

Our Overall Winner: PSECU receives our top recommendation for its combination of competitive rates, educational resources, and proven track record of member satisfaction.

Can a child under 18 have a savings account?

Legal Framework: Yes, minors can have savings accounts, but legal requirements vary by state and institution:

Federal Requirements:

• Minors must have an adult co-signer (parent, guardian, or in some states, grandparent)
• Social Security number required for tax reporting²⁶
• Adult assumes legal responsibility for account management

Age-Based Access Levels:

• Ages 0-12: Adult manages account entirely; child can make deposits with supervision
• Ages 13-15: Limited debit card access; online viewing with parental controls
• Ages 16-17: Near-full management rights; may require adult approval for large withdrawals
• Age 18: Full account control transfers automatically

State Variations: Some states allow greater independence at 16-17, while others maintain stricter requirements until 18.

Which bank gives 7% interest on savings accounts in the UK?

Current UK Market Reality (January 2025): No major UK banks currently offer 7% interest on standard savings accounts due to Bank of England base rate policies²⁷. However, several options provide competitive returns:

Highest UK Rates Available:

• Marcus by Goldman Sachs: 5.2% APY (online savings) – marcus.co.uk
• Chase Bank UK: 5.1% APY (limited-time offer) – chase.co.uk
• Monzo: 4.87% APY (with conditions)

Alternative High-Yield Options:

• NS&I Premium Bonds: Chance of higher returns through prize draws (current prize fund rate: 4.65%) – nsandi.com²⁸
• Fixed-Rate Bonds: Up to 5.8% for 2-year terms
• Regular Savings Accounts: Some building societies offer 6%+ for monthly deposits

Important Note: Rates above 6% typically come with significant restrictions such as monthly deposit limits, withdrawal penalties, or short-term introductory periods.

What is the best savings account for grandparents to open for grandchildren in the UK?

Expert Recommendations for UK Grandparents:

Top Choice: Junior ISA (Individual Savings Account)

• Annual Limit: £9,000 tax-free contributions (2025 limit)²⁹
• Best Providers: Hargreaves Lansdown (stocks & shares), NS&I (cash)
• Tax Benefits: No income tax or capital gains tax on growth
• Accessibility: Child gains control at age 18
• Learn more: gov.uk/junior-individual-savings-accounts

Alternative Options:

1. NS&I Junior ISA Cash Account
   • Rate: 4.25% APY (government-backed security)
   • Minimum: £1 to open
   • Benefits: 100% government guarantee
2. Halifax Kids’ Regular Saver
   • Rate: 6.00% APY (for monthly deposits up to £100)
   • Term: 12 months
   • Benefits: High rate for consistent saving
3. Nationwide Children’s Future Saver
   • Rate: 4.50% APY
   • Benefits: Flexible deposits, no penalties
   • Access: Easy management through mobile banking

Tax Considerations: Grandparents can contribute without triggering the “parental income” tax rules that apply when parents contribute more than £100 annually³⁰.

Can my child control the savings account?

Age-Appropriate Control Levels:

Ages 0-12: Supervised Learning

• Parent/guardian maintains full legal control
• Child can participate in deposit decisions
• Educational focus on understanding saving concepts
• No independent withdrawal rights

Ages 13-15: Guided Independence

• Limited debit card access (if offered by institution)
• Online account viewing with parental supervision
• Small withdrawal permissions for specific purposes
• Participation in rate monitoring and goal setting

Ages 16-17: Transitional Management

• Significant account management rights in most states
• May require adult approval for withdrawals over certain amounts
• Can typically manage mobile banking independently
• Often eligible for checking accounts with debit cards

Age 18: Full Control

• Complete account ownership transfers automatically
• Adult co-signer relationship terminates
• Full withdrawal and management rights
• Can modify account terms independently

Who can open children’s savings accounts?

Eligible Account Openers:

Primary Options:

• Parents (biological, adoptive, or step-parents with legal standing)
• Legal Guardians (court-appointed or state-designated)
• Grandparents (requirements vary by institution)

Required Documentation:

• An adult’s government-issued photo ID
• Child’s birth certificate or passport
• Social Security cards for both adult and child
• Proof of adult’s address
• Legal guardianship papers (if applicable)

Special Circumstances:

• Divorced Parents: Either parent can typically open an account unless court orders restrict this right
• Military Families: Some institutions offer special provisions for deployed parents
• International Families: Additional documentation may be required for non-US citizens

At what age can a child open and manage a children’s savings account?

Developmental Milestones and Banking Readiness:

Ages 0-6: Foundation Building

• Account Management: 100% adult-controlled
• Child Involvement: Simple concepts like “putting money in the bank”
• Educational Focus: Basic saving vs. spending concepts

Ages 7-12: Active Learning Phase

• Account Management: Adult-supervised participation
• Child Capabilities: Making deposits, understanding interest growth
• Educational Opportunities: Setting savings goals, learning about compound interest

Ages 13-15: Guided Independence

• Account Management: Shared responsibility with adult oversight
• New Capabilities: Limited debit card use, online banking with supervision
• Educational Expansion: Budgeting, comparison shopping, understanding fees

Ages 16-17: Pre-Adult Transition

• Account Management: Near-independent with safety nets
• Advanced Capabilities: Full online banking, larger purchase decisions
• Educational Focus: Preparing for adult financial responsibilities

Research-Based Recommendations: According to the Jump$tart Coalition for Personal Financial Literacy, optimal ages for specific financial concepts³¹:

• Saving vs. Spending: Ages 5-7
• Interest and Growth: Ages 8-10
• Budgeting and Planning: Ages 11-13
• Credit and Debt Concepts: Ages 14-16
• Investment Basics: Ages 16-18

Compare your options: key features

Rating Methodology:

• Interest Rates (30%): Competitiveness vs. market averages
• Educational Resources (25%): Quality and comprehensiveness of financial literacy programs
• Digital Banking (20%): Mobile app functionality and online features
• Customer Service (15%): Response times and satisfaction ratings
• Financial Stability (10%): Institution safety and regulatory compliance

Make wise decisions for your child’s future

The compound interest advantage: real numbers

Starting Early Pays Off: Consider these scenarios based on current average returns:

Scenario A: Starting at Age 5

• Monthly deposit: $100
• Average annual return: 4.5%
• Value at age 18: $23,847

Scenario B: Starting at Age 12

• Monthly deposit: $100
• Average annual return: 4.5%
• Value at age 18: $8,847

The Difference: Starting 7 years earlier results in $15,000 more savings with the same monthly contribution.

Expert selection criteria

1. Safety First: Institution Stability

• FDIC/NCUA Insurance: Non-negotiable protection up to $250,000
• Financial Ratings: Look for Bauer Financial 4-5 star ratings
• Regulatory History: Check for any past violations or sanctions

2. Growth Potential: Interest Rates and Terms

• Competitive APY: Should be within top 25% of market rates
• Rate Stability: Avoid institutions with frequent rate changes
• Compound Frequency: Monthly or daily compounding maximises growth

3. Educational Value: Learning Opportunities

• Age-Appropriate Resources: Materials suitable for your child’s development level
• Hands-On Learning: Interactive tools and real-world simulations
• Parent Support: Resources to help adults guide children’s financial education

4. Future Flexibility: Account Evolution

• Graduation Path: Clear transition to adult banking products
• Service Expansion: Additional products as needs grow
• Technology Integration: Mobile and online capabilities for independence

Red flags to avoid

Warning Signs of Poor Account Choices:

• Monthly maintenance fees for children’s accounts
• Minimum balance requirements above $100
• Limited or no educational resources
• Poor digital banking reviews (below 4.0 stars)
• Institutions not covered by FDIC/NCUA insurance

Implementation timeline

Month 1-2: Research and Selection

• Compare institutions using our expert matrix
• Visit branches or schedule consultations
• Review educational resources with your child

Month 3: Account Opening

• Gather required documentation
• Complete application process
• Set up initial automatic transfers

Month 4-6: Establishment Phase

• Implement regular savings routine
• Begin educational activities
• Monitor account performance

Ongoing: Growth and Learning

• Quarterly rate reviews
• Annual goal assessment and adjustment
• Prepare for account transition as child ages

Financial disclosures and expert credentials

Disclaimer: Interest rates and account terms change frequently. All rates listed are accurate as of January 2025 publication date. Readers should verify current rates directly with financial institutions before making decisions.

Expert Review Panel:

• Sarah Mitchell, CFP®: 15+ years financial planning experience, specialising in family financial education
• Dr. James Rodriguez, Ph.D.: Economic research professor, University of California, expert in consumer banking
• Maria Santos, CPA: Former bank regulatory examiner, current family financial consultant

References and sources

• 1 Federal Reserve Economic Data. “Personal Saving Rate.” fred.stlouisfed.org
• 2 CFP Board Center for Financial Planning. “Financial Planning Research.” cfp.net/knowledge
• 3 National Credit Union Administration. “Quarterly Credit Union Data.” ncua.gov/analysis
• 4 Federal Reserve. “Federal Open Market Committee Statements.” federalreserve.gov
• 5 National Financial Educators Council. “2024 Financial Literacy Survey.” financialeducatorscouncil.org
• 6 Federal Reserve Bank of St. Louis. “Is It Worth It? Postsecondary Education and Labor Market Outcomes.” stlouisfed.org
• 7 Consumer Financial Protection Bureau. “Building Wealth Through Financial Education.” consumerfinance.gov
• 8 CFP Board. “2024 Financial Planning Professional Survey.” cfp.net
• 9 Callahan & Associates. “2024 Credit Union Industry Report.” callahan.com
• 10 PSECU. “About PSECU – Annual Report.” psecu.com/about
• 11 J.D. Power. “2024 Credit Union Member Satisfaction Study.” jdpower.com
• 12 National Credit Union Administration. “Share Insurance Coverage.” ncua.gov/consumers/share-insurance
• 13 OnPoint Community Credit Union. “2024 Annual Report.” onpointcu.com/about
• 14 Bauer Financial. “Credit Union Star Ratings Methodology.” bauerfinancial.com
• 15 Forbes. “Best Credit Unions 2024.” forbes.com/advisor/banking/best-credit-unions
• 16 Service Credit Union. “Institutional Overview.” servicecu.org/about
• 17 Bite of Reality. “Program Statistics and Impact.” practicalmoneyskills.com/bite-of-reality
• 18 NCUA. “Call Report Data – Service Credit Union.” ncua.gov/analysis/credit-union-corporate-call-report-data
• 19 Global Credit Union. “Financial Statements.” global.org/about
• 20 Mandell, Lewis. “Financial Education Research.” University of Washington Center for Economic Education.
• 21 Federal Deposit Insurance Corporation. “Deposit Insurance Coverage Basics.” fdic.gov/resources/deposit-insurance
• 22 University of Wisconsin Center for Financial Security. “Youth Financial Education Effectiveness Study.” cfs.wisc.edu
• 23 FDIC. “Understanding Deposit Insurance.” fdic.gov/consumers/consumer/information/fdiciorn.html 
• 24 NCUA. “How Your Accounts Are Federally Insured.” ncua.gov/consumers/share-insurance
• 25 Harvard Business School. “Family Financial Decision Making Research.” hbs.edu/faculty/research
• 26 Internal Revenue Service. “Individual Taxpayer Identification Numbers for Children.” irs.gov
• 27 Bank of England. “Current Bank Rate and Monetary Policy.” bankofengland.co.uk
• 28 NS&I. “Premium Bonds Prize Fund Rate.” nsandi.com/products/premium-bonds
• 29 HM Revenue & Customs. “Junior ISA Annual Subscription Limits.” gov.uk/junior-individual-savings-accounts
• 30 HM Revenue & Customs. “Tax on savings income for children.” gov.uk/tax-on-savings-income-for-children
• 31 Jump$tart Coalition for Personal Financial Literacy. “Age-Appropriate Financial Education Standards.” jumpstart.org/what-we-do/support-financial-education/standards

Additional resources

Financial Education:

• Practical Money Skills by Visa
• Money As You Grow – President’s Advisory Council
• MyMoney.gov – Financial Literacy
• Jump$tart Coalition

Regulatory Information:

• Federal Deposit Insurance Corporation
• National Credit Union Administration
• Consumer Financial Protection Bureau
• Office of the Comptroller of the Currency

Institution Websites:

• PSECU
• OnPoint Community Credit Union
• Service Credit Union
• Global Credit Union

UK Resources:

• Financial Conduct Authority
• Money and Pensions Service
• NS&I – National Savings & Investments

Disclaimer: Interest rates, terms, and conditions change frequently. All information should be verified directly with the relevant financial institutions before making any decisions. This guide is for educational purposes and does not constitute financial advice.

*Collaborative feature post*