When you’re a kid, it’s always a great feeling to take important first steps, and in the financial world, one of those steps is your first bank account. A kid’s first bank account is an important step in helping kids understand financial responsibility. Financial responsibility goes beyond saving quarters in a piggy bank. It starts with children learning to think critically about their financial decisions and money management.
But what options are out there that are kid (and parent) friendly? Check out some of the kid’s bank accounts programs these major banks have to offer:
Bank of America
Bank of America offers two types of accounts for children under 18; a Minor Savings Account, and a Custodial (UTMA) Account. The Minor Savings Account, which is jointly owned by the minor and the custodian, offers many benefits that help kids get the experience of having a bank account, without having to worry about additional fees and charges.
These benefits include:
- Access to balance before Age 18
- Ability to make automatic transfers
- 0.01% interest rate and APY
- No monthly maintenance fee
- No Withdrawal Limit Fee for accounts with a $300 or more balance
- Account changes automatically to a regular savings account when minor turns 18.
The Custodial Account, in comparison, is owned by the custodian alone, has a $5 monthly maintenance fee, and has no withdrawal limit fee for accounts with a $20,000 or more balance. So while the Custodial Account is a great option for a parent saving for their child, the Minor Savings Account is the best option give a child responsibility for their own savings.
For more information on these Bank of America Accounts, click here.
Wells Fargo’s “Way2Save” Savings Account is another great option for children to be responsible and watch their savings grow. Similar to Bank of America, the account requires a $25 minimum opening deposit and no monthly service charge. Way2Save accounts offer more personalized options for ownership of the account, including;
- Joint Ownership: Account access is owned by both child and guardian. Both can make deposits and withdrawals, and an optional debit card is available for the child.
- Minor By: Guardian has sole access to funds until the child reaches 18. Only guardians can make transfers, withdrawals, and deposits
- Child Sole: A unique option to Wells Fargo, this account give the child sole access to make deposits and withdrawals for this account, as well as debit card access. The bank also allows children access to Wells Fargo Online Banking at age 13.
- Uniform Transfers/ Gifts to Minors Act (UTMA/UGMA): Allows adults to give children a gift that can be accessed at Age 18 (or whatever age is specified under this act)
These accounts include access to transfers from custodian accounts and free online statements to help show a child as their savings accounts grow.
For more information on the “Ways2Save” Savings Account, click here.
The “S is for Savings” Account for PNC Bank is one of the most beneficial for helping teach kids financial facts and responsibility as they use the account. Similar to the other accounts, there is a minimum $25 opening deposit and no monthly fee before age 18. This account is especially good for young children, because of its ample amount of interactive online features. These include:
- Interactive Online Banking: Helps child gain knowledge and practice in saving, sharing and spending.
- Tips from Sesame Street: Has a number of activities parents and children can do together to build on basic money concepts.
- Goal Setting: Helps kids set and monitor goals that they can achieve over time.
Other features include earning interest on any balances over $1.00, an option to set-up Auto Savings to create a financial routine for the child, and no limit on deposits or transfers. If you’re looking to start a young child on the path to financial success, PNC is a great option for savings.
To apply for a “S is for Savings” Account, click here.
Though a smaller financial institution, Liberty Bank shows the benefits of checking out banks that are local to your state or area. Liberty’s “All-Star” Savings Account is a bank account that allows kids to see their savings grow and get rewarded along the way. Liberty has a low opening deposit cost of $10, and no monthly fees. Other features include:
- No minimum balance requirement
- A yellow passbook so children can physically watch their savings grow
- $5 for every A on a report card
- Access to view online activity with the help of a parent or guardian.
For more information on the “All-Star” Savings Account, click here.
Many local banks have similar kids bank account programs to these, so make sure to check out banks, credit unions and other financial institutions that are closest to you. These banks and many more have such great options to pair financial learning with practice. Opening a kids bank account offers the ability for a child to save money and create a positive financial experience. We recommend starting your childs financial education as early as possible!
Author: Clarice Swanson