Savings account options for parents in the USA

Parents & guardians · Parent guide · Updated October 1, 2026 · LearnLife Editorial

Why is teaching savings important for kids and when does it usually click?

Teaching kids about savings early helps them develop responsible money habits that benefit them throughout life. Very young children, around ages 3 to 5, can begin to grasp the idea of saving by physically putting coins into a piggy bank or jar. This simple act introduces the concept of setting money aside rather than spending it immediately.

Between ages 6 and 8, children start to understand delayed gratification—the idea that waiting allows you to buy something more valuable later. For example, telling a child, “If you save your allowance for a few weeks, you can buy that new book you want,” helps them connect saving with achieving goals. This age is ideal for setting small savings targets, like saving for a toy or a small outing.

By the time children reach 9 to 12 years old, they can begin to understand more abstract financial concepts such as interest and bank accounts. Opening a custodial savings account with a parent can help them see their money grow and learn to read simple bank statements.

For teenagers (13-18 years), it’s a good time to deepen financial literacy by discussing budgeting, comparing interest rates, and even introducing joint or personal savings accounts. Teens can also start using savings to plan for larger goals like a car, college, or travel.

Starting early and building knowledge in stages helps children develop confidence and a positive relationship with money. It also prepares them to manage finances independently as adults.

What types of savings accounts can parents open for their children?

Parents in the USA have several options to open savings accounts that allow children to participate safely in managing money:

• Custodial Savings Account: This is a common choice where the parent or guardian manages the account until the child reaches the age of majority (usually 18 or 21 depending on the state). The money legally belongs to the child but is controlled by the adult until then. It’s a good option because it teaches ownership while ensuring adults can oversee transactions.

• Joint Savings Account: Both parent and child have equal access to the account. This works well for teenagers who are ready for more responsibility. It allows parents to monitor activity while giving teens hands-on experience.

• Children’s Savings Accounts: Many banks offer savings accounts designed especially for kids. These accounts often have no minimum balance, low or no fees, and parental controls to limit withdrawals. They are beginner-friendly and encourage saving as a habit.

• High-Yield Savings Accounts: These accounts offer interest rates higher than traditional savings accounts, helping money grow faster. While typically designed for adults, parents can use them to save for family goals or long-term child expenses. Some online banks offer high-yield options with no monthly fees.

When choosing an account, parents should compare interest rates, fees, minimum deposit requirements, and availability of online access. Also, verify that the bank or credit union is insured by the FDIC or NCUA for security. Starting with a basic children’s or custodial account often works best, then transitioning to a joint or personal account as the child matures.

For current recommendations and rates, parents can review articles like Best savings account options for parents.

How can parents teach savings with an age-by-age approach?

Creating a clear, stepwise plan helps children learn savings skills at a pace suited to their development:

Practical examples:

• For a 7-year-old, parents can say, “If you save $2 each week, after 10 weeks you will have $20. What would you like to buy with your savings?”
• For a 14-year-old, help them budget a monthly allowance: “Let’s put 50% in savings, 30% for spending, and 20% to donate or gift.”

This structure allows children to build skills gradually through hands-on experience and clear incentives.

What are some exact scripts parents can use to talk about savings?

Using simple, encouraging language helps children feel motivated and involved. Here are a few examples parents can adapt:

• To a young child: “When you put money in your piggy bank, it’s like planting seeds. Over time, your money will grow, and you can use it for something special.”
• To an elementary-school child: “Saving means waiting to buy something later instead of spending now. Let’s set a goal together and watch how your money grows.”
• To a teen: “Having a savings account means your money is safe and earns interest. It’s like getting a small reward for saving instead of spending. Let’s check your account balance this week.”
• To encourage regular saving: “Every time you get money, try putting a part of it in savings. Even $1 adds up over time.”

Using these scripts during regular talks or when giving allowance helps normalize saving as part of everyday life.

How can parents use everyday moments to practice savings?

Parents can turn ordinary routines into teaching opportunities:

• Allowance time: Help children divide money into “save,” “spend,” and “share” jars or envelopes. For example, if your child receives $10 allowance, suggest putting $4 in savings, $4 in spending, and $2 in sharing.
• Shopping trips: Compare prices and explain how saving helps afford better or wanted items. Say, “If you save part of your money now, you can buy the bigger toy next time.”
• Bank visits: Take your child to deposit money in their savings account. Show them the transaction slip or check the balance on an ATM or online app.
• Goal celebrations: Celebrate when savings goals are met, reinforcing positive feelings. For example, “You saved $50 for your bike—great job! Let’s go pick it out this weekend.”
• Discuss money setbacks: If your child spends savings impulsively, talk about what happened calmly and set a new plan. “It’s okay to spend sometimes; what matters is learning to save again.”

Using these concrete moments makes saving real and builds habits naturally.

What mistakes do parents often make when teaching savings?

Parents want to help but sometimes unintentionally hinder their child’s learning by:

• Avoiding money talks: Not discussing money openly creates mystery and may cause anxiety or misconceptions.
• Setting unrealistic expectations: Demanding children save too much too fast can discourage them.
• Not involving the child: Managing savings without explaining or including the child limits their learning.
• Choosing complicated accounts: Opening accounts with fees or hard-to-understand terms can frustrate parents and kids.
• Ignoring emotions: Overlooking feelings around money, such as disappointment or impatience, misses opportunities for teaching resilience.
• Overprotecting money: Not allowing children any access to their savings may prevent them from learning how to manage funds responsibly.

Parents can avoid these mistakes by communicating clearly, being patient, and making saving practical and rewarding.

When should parents get extra help with teaching savings?

Sometimes, parents benefit from outside resources to support their teaching efforts:

• If children struggle to understand savings despite repeated efforts, consider financial education workshops or children’s books about money.
• For parents unsure about bank account choices, consulting a bank representative or financial counselor can clarify options.
• Families facing complex money issues like debt or budgeting might find help from nonprofit credit counseling agencies.
• When teaching teens about credit, investing, or taxes, parents can use trusted online resources or invite professionals to discuss these topics.
• Schools and community centers often offer free or low-cost financial literacy programs for families.

Getting additional help ensures parents provide accurate information and reinforces lessons with expert support.

Frequently asked questions

Can parents open a savings account for a child without a Social Security number?

Most banks require a child’s Social Security number to open a custodial or joint savings account. This ensures proper identification and tax reporting. If you don’t have one, check with the bank for alternatives or obtain the child’s Social Security number through the Social Security Administration.

What’s the difference between a custodial and a joint savings account?

A custodial account is controlled by the parent until the child reaches adulthood, at which point ownership transfers to the child. A joint account gives both parent and child equal access from the start, ideal for teens ready for more responsibility.

Are high-yield savings accounts safe for parents?

Yes, if the account is with an FDIC-insured bank or NCUA-insured credit union, it is safe. High-yield accounts offer better interest rates but be sure to review terms and fees before opening.

How much money should parents start saving with their child?

There is no minimum amount. Starting with small, manageable sums—even just a few dollars—helps establish the habit. Consistency matters more than size.

What if my child spends their savings impulsively?

Use it as a teaching moment. Talk about what happened, encourage reflection, and set new savings goals. Remind your child that learning to save well takes practice and patience.