The best children’s savings account for your family will ultimately depend on the specific savings goals you have, the country you want to bank in, and the restrictions you are willing to accept.
In this article, we will explore all of these variables and more. Additionally, we will answer the most common questions we receive about choosing the best children’s accounts.
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Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- What Is the Best Children’s Savings Account?
- Savings vs Children’s Savings
- What Are the Benefits of Opening Savings Accounts?
- How Is a Children’s Savings Account Opened?
- Frequently Asked Questions
- Do You Want Help Opening Bank Accounts?
What Is the Best Children’s Savings Account?
The best children’s savings account for each child will depend on a range of variables, including age, objectives, parent profile, initial deposit, and ongoing contributions. With this in mind, parents need a clear understanding of these variables before choosing where to open accounts for their children.
Not surprisingly, many banks will try to attract parents with an initial high interest rate. However, opening accounts purely based on the interest rate would skip many other key variables, in terms of client profile, contributions, savings goals, and more.
In the following sections of the article, we’re going to share important information on the benefits of opening children’s savings accounts and how to proceed with the account opening process.
If you’re looking for account opening guidance on the best joint bank accounts you can access our free guide linked here to get started.
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Savings vs Children’s Savings
The main difference between a savings account and a children’s savings account is that a children’s savings account requires the applicant to be under a certain age, while a regular savings account requires the applicant to be over a certain age.
Additionally, children’s savings accounts typically offer higher interest than savings accounts while also having more restrictions. In other words, there are benefits and drawbacks to opening a children’s savings account when compared to a regular savings account.
That said, many of the benefits that savings accounts offer are the same, regardless of the age of the account holder. With this in mind, let’s take a look at the benefits that account holders can expect now.
What Are the Benefits of Opening Savings Accounts?
The benefits of opening a savings account range from compound interest to higher interest rates and immediate access to your funds to fewer restrictions than comparable accounts. To help illustrate the benefits further, we have shared a few of the most important benefits of opening a savings account below.
Benefits of Opening a Savings Account
- Higher interest than a checking account
- Compounding interest on savings
- Fewer restrictions than fixed (or certificates of) deposits
- Ability to access your funds immediately
- And more
How Is a Children’s Savings Account Opened?
The process of opening a children’s savings account will depend on the bank. In many instances, banks have an age restriction on when accounts can be opened. However, certain banks do not restrict the age and allow parents to open accounts for newborns. Once the parent has qualified the age, then they can begin the account opening process.
Not surprisingly, one of the most important steps in the account opening process is meeting the bank’s requirements. With this in mind, let’s look at the specific requirements that parents and children should expect.
Requirements for Opening a Children’s Savings Account
Requirements for opening a children’s savings account will vary between banks, as mentioned. However, in most cases, banks require the parent to apply for an account by providing all of the supporting information.
Next, the parent will need to provide information for the child, including supporting documentation like a passport and birth certificate. Once the documentation is confirmed and the application is complete, the parent will need to make a qualifying deposit.
Can I Open a Fixed Rate Savings Account?
Yes, you can open a fixed-rate savings account. Fixed-rate savings accounts are available for all account holders, ranging from adults to children. In most cases, the best children’s accounts offer much higher interest rates than those available to adult account holders.
Frequently Asked Questions
Below are three of the most common questions we receive from people looking into the best children’s accounts. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
Are Children’s Savings Accounts Safe?
Children’s savings accounts are as safe as the bank that holds them. In other words, if you open a children’s savings account with a bank that has adequate capital reserves, does not engage in high-risk investing activities, and is backed by deposit insurance, then there is a strong likelihood that both the bank and the children’s savings accounts are safe.
What Are Savings Accounts for Kids?
Savings accounts for kids are typically high-interest accounts that encourage children and parents to save money toward a child’s future. In most cases, savings accounts for kids offer higher interest rates than those available to adults. However, they typically have more restrictions on the amount that can be deposited, the number of withdrawals that are permitted per month, and more.
What Are the Benefits of Opening a Kids Savings Account?
The benefits of opening a kid’s savings account range from teaching children about financial independence, saving money for their future expenses, giving them an opportunity to save gifts from family and friends, and teaching them the long-term benefits of compound interest.
Do You Want Help Opening Bank Accounts?
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