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Do you remember how old you were when you had your first bank account? I opened my first account alongside my mom (who was listed as the joint owner) at a nearby credit union when I was in the third grade. For years, that account served as a savings vehicle where I put money from holidays, eighth-grade graduation and ��at 15 years old �� my first job.

That�s actually not too outside the norm: In 2020, 49% � nearly half ��of American children had a savings account, according to Statista.

And money management should start early for kids. Parents should make trips to the bank with them � and make them a big deal � beginning around age 6. You can help them open a savings account, and use that experience to introduce different money concepts, like how they�ll earn interest by leaving their money in the bank.

Good news: Many big-name banks offer accounts for minors, and lots of them are low- or no-fee. Here�s what you need to know about the best savings accounts for kids and other bank products.

Why You Should Open a Bank Account for a Minor

It may be tempting to hold on to your children�s money for them in your own savings account or let them keep it in a piggy bank. But it�s a good idea to open a bank account for them for several reasons.

Opening a bank account can:

Help kids learn the value of money, from saving to spending it. Help them understand compound interest and how it makes their money grow. Help them learn to delay instant gratification by saving toward a goal.

Opening an account is also a great way to teach, or reinforce, good budgeting habits. Your child can start learning about saving for college, put money in a high-yield savings account or create a sinking fund (typically, money outside of a traditional savings account or emergency fund) for a summer vacation. By starting early, they�ll have a better understanding of how money can be a tool to help them achieve their goals and learn about financial responsibility.

How to Open a Bank Account for Someone Under 18

While a minor can have a bank account in their name, an adult must open the account. So, a parent or guardian can open a joint checking or savings account with their child, thereby becoming the joint account holder. An immediate family member other than a parent or guardian, like an older sibling, can usually open an account with a minor, too.

Some accounts cater to young children, while others focus on teens. Different banks and states may also have rules about the age of a minor on an account, so you�ll want to do your due diligence.=

For the most part, you can open accounts online or in person. Bank requirements will vary, but you typically need:

Your child�s Social Security Number (SSN). Their passport or birth certificate. Your (the parent or guardian) own identifying information.

What You Should Look for in Savings Accounts for Minors

Before deciding on an account, you�ll want to consider the following and make a checklist of the most important features for you and your family:

Is there a minimum deposit required? Is there a monthly fee? What�s the annual percentage yield (APY) of an account? Is there a daily balance requirement? Is there a service fee?

And some additional questions you may want to consider:

Do you get a free debit account? Is there a mobile banking app? Are there add-ons ��financial education materials, the opportunity to meet with a financial advisor etc. � available?

Other features may be important to you � say, the ability to transfer money into your child�s account as often as you want. Or the ability to have multiple accounts within the bank or credit union to take advantage of more than just a checking or savings account.

Keep in mind that if a brick-and-mortar bank isn�t for you and your kid, an online bank or other financial institution is worth looking into for an account. For this assessment, we focused on large banks with physical locations who also have strong online offerings and mobile apps.

Check Out Your Local Credit Union

It�s always worth checking in on your neighborhood credit union to see what, if anything, they offer in terms of a youth savings account . Or, they may be able to offer more personalized service, an account with a higher APY or other perks.

A quick note: There are money accounts for children outside of traditional bank accounts that are known as UTMAs, which stands for Uniform Transfers to Minors Act. In these types of accounts, gifts of high value (money, real estate, etc.) �can be transferred to a custodian for the benefit of a minor,� according to the U.S. Social Security Administration, until the child becomes a legal adult. The savings are tax-free for the minor until they assume the account. But the assets are considered part of the custodian�s estate and are taxed accordingly.

Roth IRAs, Uniform Gifts to Minors Act (UGMA) and 529 College Savings Plans are other examples of savings vehicles for the under-18 set.

Frequently Asked Questions (FAQs) About Savings Accounts for Kids

We know you have a lot of questions about savings accounts for kids. We�ve rounded up the answers to some of the most commonly asked questions.

Contributor Kathleen Garvin (@itskgarvin) is a personal finance writer based in St. Petersburg, Florida, and former editor and marketer at The Penny Hoarder. She owns a content-writing business and her work has appeared in U.S. News, Clark.com and Well Kept Wallet.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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