Kids Bank Account: How to Open One (And Why It Matters)

By Maya Hartwell

Only 37% of Kids Have Bank Accounts

According to the Consumer Financial Protection Bureau, just 37% of kids under 18 have their own bank accounts. That's wild to me, because opening a kids bank account is one of the easiest ways to teach financial literacy — and it costs you nothing.

I didn't open accounts for my kids until my oldest was 10. I thought she was "too young" to understand banking, so her birthday money sat in a jar on her dresser. Then one day she asked me why her money wasn't growing like mine does.

I realized I'd been teaching her that money just sits there. That's not how money works, and it's definitely not what I wanted her to believe.

A kids bank account fixes this. It shows your kid that money can grow (through interest), that there are systems for keeping it safe, and that managing money involves more than stuffing cash in a drawer.

The Real Issue: Piggy Banks Don't Teach Banking

Piggy banks are great for kids under 6. They make money visible, they teach the concept of accumulation, and they're satisfying to shake.

But once your kid is old enough to understand numbers and balances — usually around age 7 or 8 — a piggy bank becomes a missed opportunity.

Here's what piggy banks don't teach: interest, account management, spending vs. saving, how to track a balance, or how financial institutions work. They also don't prevent your kid from dumping out the jar and spending everything on Pokemon cards. (My 9-year-old did this. Twice.)

A bank account teaches all of those things. Your kid sees the balance grow. They learn that money in a bank is harder to access than money in a jar, which builds impulse control. They start to understand that money has a location and a purpose.

Plus, most kids savings accounts pay interest — not much, but enough for your kid to see that $100 becomes $102 without them doing anything. That's a lightbulb moment.

Step-by-Step: How to Open a Kids Bank Account

Opening a kids bank account takes about 20 minutes. Here's exactly what to do.

Step 1: Pick a Bank That Offers Kids Accounts

Not all banks have dedicated kids accounts, but most do. Look for these features:

• No monthly fees — this is non-negotiable
• No minimum balance requirement — your kid shouldn't be penalized for having $12 in savings
• Interest-bearing — even 0.5% APY is better than zero
• Online access — your kid should be able to log in and see their balance

Some popular options (as of August 2026):

• Capital One Kids Savings Account — 3.8% APY, no fees, no minimums
• Chase First Banking — debit card for kids 6–17, parent controls, no fees
• Alliant Credit Union Kids Savings — 4.1% APY, no fees, but you need to open an adult account first
• Local credit unions — often have the best rates and will do a branch visit with your kid

I use Capital One for my 9-year-old because the app is simple and the interest rate is decent. My 13-year-old has Chase First Banking because it includes a debit card she can use.

Step 2: Gather Your Documents

You'll need:

• Your driver's license or state ID
• Your Social Security number
• Your kid's Social Security number
• Proof of address (utility bill, lease, mortgage statement)
• Your kid's birth certificate (some banks require this, some don't)

If you're opening the account online, you'll upload photos of these documents. If you're going to a branch, bring physical copies.

Step 3: Open the Account (Online or In-Person)

Online: Go to the bank's website, find the kids savings account, and click "Open Account." You'll enter your info, your kid's info, and link a funding source (usually your checking account). The whole process takes 10–15 minutes.

In-person: Make an appointment, bring your documents, and go to the branch. This takes longer (30–45 minutes), but it's a better teaching moment. Your kid gets to meet a banker, ask questions, and see how banks work.

I did in-person for my oldest and online for my youngest. Both work. If your kid is curious and asks questions, do in-person. If they're shy or you're short on time, do online.

Step 4: Make the First Deposit

Most banks require a minimum opening deposit — usually $5 to $25. Let your kid make this deposit.

If you're at a branch, hand them the cash and let them give it to the teller. If you're online, have them transfer the money from their piggy bank to your checking account first, then move it to their new savings account.

This might seem overly ceremonial, but it matters. Your kid needs to feel like this is their money moving into their account.

Step 5: Set Up Online Access for Your Kid

Most banks let kids log in to see their balance and transaction history. Set this up immediately.

Create a username and password with your kid (write it down somewhere safe — they will forget it). Show them how to log in, where to find their balance, and how to see deposits and withdrawals.

My 9-year-old checks her balance every Saturday morning. It's become part of her routine, and she gets genuinely excited when she sees it go up.

Step 6: Explain How Interest Works

This is the best part. Open a calculator (or a spreadsheet if your kid is into that) and show them how interest compounds.

"You have $50 in your account. The bank pays 4% interest every year. That means next year, you'll have $52 — without adding any money. The year after that, you'll have $54.08, because you earn interest on the $52, not just the original $50."

My daughter's mind was blown by this. She immediately wanted to deposit all her birthday money.

What People Get Wrong About Kids Bank Accounts

Myth 1: "My Kid Is Too Young for a Bank Account"

I thought this too. But there's no "too young" — you can open a custodial savings account for a baby if you want.

The real question is: Is your kid old enough to understand that the account exists and that money in it grows? That usually happens around age 6 or 7.

If your kid can count to 100 and understands that 52 is more than 50, they're ready for a bank account.

Myth 2: "Banks Are Just Going to Charge Me Fees"

Not if you pick the right account. Kids savings accounts are designed to have zero fees and zero minimums.

If a bank is trying to charge you a monthly fee for your 8-year-old's savings account, walk away. There are dozens of free options.

Myth 3: "I Should Wait Until My Kid Has 'Enough' Money to Open an Account"

You don't need $500 to open a kids bank account. Most banks let you start with $5 or $10.

The point isn't the amount — it's the behavior. You're teaching your kid that money goes into a bank, not a jar. Start with $10 and build from there.

Myth 4: "Apps Like Greenlight Are Better Than Real Bank Accounts"

Apps like Greenlight, GoHenry, and BusyKid are great tools, but they're not replacements for a bank account.

Here's the difference: Greenlight is a prepaid debit card with parental controls. It's excellent for teaching spending and budgeting. But it's not a savings account, and it doesn't teach your kid how banks work.

A traditional kids bank account teaches your kid how to interact with financial institutions. They learn that banks exist, that money is insured (FDIC), that accounts have routing numbers and account numbers, and that interest is a real thing.

I recommend both. Open a savings account first (ages 6–10). Add a debit card app later (ages 10–13). They serve different purposes.

Myth 5: "My Kid Will Just Withdraw All the Money Immediately"

This is actually hard to do with a kids savings account. Most don't come with a debit card (you have to request one separately), and withdrawals require parent approval.

If your kid wants to take money out, they have to ask you first. That's a feature, not a bug — it creates a natural checkpoint for conversations about spending.

Quick Wins: What to Do This Week

You don't have to open an account today. But here are three things you can do this week to move forward:

1. Ask Your Kid If They Want a Bank Account

Seriously. Just ask: "Would you like to open a bank account where your money can grow?"

If they say yes, explain what that means. If they say no, ask why. You might learn that they're worried about losing access to their money, or they don't trust banks, or they just don't understand what you're offering.

My 9-year-old was initially hesitant because she thought "bank account" meant she couldn't spend her money. Once I explained that she could still withdraw it whenever she wanted (with my help), she was all in.

2. Compare Three Banks

Pick three banks or credit unions and compare their kids accounts. Look at:

• Monthly fees (should be $0)
• Minimum balance (should be $0)
• Interest rate (higher is better, but anything above 0.5% is fine)
• Online access (your kid should be able to log in)
• Debit card availability (optional, but useful for older kids)

Make a simple spreadsheet or just write it down. This takes 15 minutes.

3. Schedule a "Bank Visit" Day

If you're opening the account in person, put it on the calendar. Make it a thing.

Tell your kid: "On Saturday, we're going to the bank to open your account. You'll meet a banker, deposit your first $25, and get your account number."

If you're doing it online, schedule a time to sit down with your kid and fill out the application together. Don't do it alone and surprise them — they need to be part of the process.

What Parents Are Actually Asking

I spend way too much time reading parenting and personal finance threads on Reddit. Here are two recent questions that came up about kids bank accounts:

"We've been going back and forth on whether to open a bank account for our 8-year-old or just use Greenlight. Anyone have experience with both?"

— Reddit user on r/Banking

I answered a version of this earlier, but here's my take: do both. Open a savings account first. It teaches your kid how banks work and how money grows.

Add Greenlight (or a similar app) a year or two later when your kid is ready to spend money independently. Greenlight is excellent for teaching budgeting and tracking spending, but it doesn't replace the foundational lesson of saving in a real bank.

Think of it this way: savings account = learning to save. Debit card app = learning to spend. Your kid needs both skills.

"My 10-year-old has been saving birthday money for two years in a piggy bank. I feel like it's time to open a real account but I don't know where to start."

— Reddit user on r/Banking

This is the perfect time to open an account. Your kid has money saved, they're old enough to understand how accounts work, and they've already developed the habit of not spending everything immediately.

Here's what I'd do: count the money in the piggy bank together. Then say, "You've saved $147. That's amazing. Let's move this to a bank account where it can grow. Next year, you'll have around $153 without adding anything."

Open the account online (Capital One or Alliant are great options), transfer the money, and show your kid the balance in their new account. They'll feel like they just leveled up.

For more ideas on how kids can earn money to put in their new account, check out our guide on how to make money as a kid.

Frequently Asked Questions

What age can a kid open a bank account?

Most banks allow you to open a custodial account for a child of any age — even babies. The account is legally in your name until your kid turns 18 (or 21 in some states).

Some banks require the child to be at least 13 to be listed as a joint owner, but you can open a savings account for a newborn if you want.

Can my kid have a bank account without me?

Not until they're 18. All bank accounts for minors are custodial accounts, which means a parent or guardian must be the legal owner.

Your kid can use the account, see the balance, and learn to manage money, but you're the one responsible to the bank.

What's the difference between a kids savings account and a regular savings account?

Kids savings accounts usually have no minimum balance, no monthly fees, and sometimes offer higher interest rates to encourage saving. Regular savings accounts often charge fees if your balance drops below $300–$500.

The actual function is identical — both accounts hold money and pay interest — but kids accounts remove the barriers that would make it impossible for a child to maintain.

Should I open a bank account or use an app like Greenlight?

Both work, and some families use both. A traditional bank account teaches your kid how actual banks work — they see a real debit card, visit a branch, talk to a teller.

Apps like Greenlight offer better parental controls and real-time spending visibility. If your kid is under 10, I'd start with a savings account at a bank. Add a debit app later when they're spending independently.

Do kids pay taxes on savings account interest?

Yes, but it probably won't matter. If your kid earns more than $1,300 in investment income (including interest) in a year, they need to file a tax return.

A savings account earning 4% APY would need a balance above $32,500 to hit that threshold. Most kids won't come close.

What happens to the account when my kid turns 18?

The account automatically converts to a regular checking or savings account in your kid's name. You lose access (unless your kid adds you back as a joint owner).

Some banks will charge fees once the account converts, so check the terms. You might need to move the money to a different account type to avoid fees.

Can I open a bank account for my kid if I have bad credit?

Usually, yes. Most banks don't run a credit check to open a kids savings account because it's a custodial account in your name.

They might check ChexSystems (a database of people who've had checking account problems), but savings accounts are generally more lenient than checking accounts.

What if my kid wants to withdraw money?

Withdrawals from a kids account require parent approval. Your kid can't just take money out on their own.

When your kid asks to withdraw money, ask why. If it's for something reasonable (a book, a toy they've been saving for), approve it. If it's impulsive (candy at the checkout), that's a teaching moment about waiting and planning.

For more structured approaches to managing money, read our article about how to open a bank account for a child.

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