Financial Literacy 102: The Fast Lane

Features of a Teen Savings Account

Most banks and credit unions offer child, youth, or student savings accounts (the name will vary). Here are the items you should consider when choosing the right account for you.  

1. Age Limits. You must be 18 or older to open your own independent account, so you will need a parent or guardian to sign on as a joint account holder. You will both have full access to the account. 

2. No Monthly Fees. Sometimes banks charge a monthly fee, such as $10, just to keep the account open. Because you likely won’t have a lot of money in the first place, $120 per year in monthly fees could really eat into your savings. Most banks and credit unions offer free savings accounts to kids, so be sure to ask.

3. No Minimum Balance Requirement. Adult savings accounts sometimes set a minimum balance, such as $1000. If your account falls below that amount, the bank or credit union will charge a fee. Be sure your teen account does not have a balance requirement before signing up.

4. Access to Your Money. Remember that you will save more if saving is easy, so keep that in mind when you choose a location. Is there a branch near your home? Will you be able to get a ride with an adult, bike, or take public transportation? Will you have access to ATMs to deposit checks or cash? 

5. Interest Rate. One benefit to saving in an account instead of a piggy bank is that your money should earn interest. While you won’t make a fortune in any savings account, look for a rate between 1-2% to benefit from compounding interest in the long term.

Once you open a youth account, you will likely have the same savings account until you turn 18 and are able to open a new account on your own, so be sure to choose wisely now!

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