Best savings accounts for teenagers

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It’s never too early to save. Opening a savings account as a teenager can help you earn some interest and learn how to save money. Even if it’s a very small amount to start off, the power of compound interest and the habit of saving can help your money grow.

Best features to look for in saving accounts for teenagers

Here are some features that the best savings accounts for teenagers offer:

  • High APY: A competitive annual percentage yield (APY) is one of the major perks of a savings account. The higher the APY, the more interest you’ll earn on your money.
  • No minimum balance to open the account: Find an account that either requires no minimum to open or a very small amount.
  • No minimum balance required to maintain the account: Look for an account that doesn’t require you to stay above a certain balance.
  • No monthly service fees: It’s better to learn banking without having to worry about maintenance fees depleting your savings.

Best savings accounts for teenagers

These accounts help teenagers earn a competitive yield on their money:

  • Best for the highest APY on all balances: Capital One Kids Savings Account, $0 minimum balance required to open the account, 0.5 percent APY.
  • Best for the highest APY on a limited balance: BECU Early Saver youth savings account, $0 minimum balance required to open the account, 4.07 percent APY on the first $500 (0.02 percent APY on $500.01 or more).
  • Best for older teenagers: Bethpage Federal Credit Union Young Adult Savings, $5 minimum balance required to open the account, 2 percent APY on the first $1,000 (0.35 percent APY on $1,000.01 or more).

Best for the highest APY on all balances

  • Capital One Kids Savings Account
  • $0 minimum opening deposit
  • 0.5 percent APY

Capital One is an online bank, but it also has a brick-and-mortar presence. Its Kids Savings Account, which is available to teenagers until they turn 18, offers the same yield on all balances. You don’t need to make a deposit to open the account, and you won’t get charged with a monthly service fee.

What to watch for: This account is a joint account that needs to be opened with an adult.

Best for the highest APY on a limited balance

  • BECU Early Saver youth savings account
  • $0 minimum opening deposit
  • 4.07 percent APY on the first $500 (0.02 percent APY on balances $500.01 or more)

BECU has more than 50 locations in Washington and two in South Carolina. BECU doesn’t require a minimum opening deposit for the Early Saver Youth Account. The account is available to teenagers until they turn 18.

What to watch for: This high APY is only available on balances up to $500. Balances above that amount will earn 0.02 percent APY. You can’t apply for this account online either.

Online banking and e-statements aren’t available to children under age 13.

You’ll need to meet certain criteria to be eligible to open an account at BECU. Living, working, worshiping or going to school in Washington state or select Idaho counties are some ways. Also, living or working in select counties in Oregon or belonging to other certain associations are other ways to meet the eligibility requirements.

Best for older teenagers

  • Bethpage Young Adult Savings
  • $5 minimum opening deposit
  • 2 percent APY on the first $1,000

Bethpage Federal Credit Union was founded in 1941 for people working at Grumman. Now, it’s open to anyone that opens a savings account, with a minimum of $5.

The credit union’s Young Adult Savings gives those 18 to 20 years old an opportunity to earn a competitive APY on the first $1,000 deposited in their account.

Bethpage also offers a Youth Savings Custodial (NYUTMA) account. This account is for those 0 to 17 years old. It requires the custodian (a parent, guardian or grandparent, for instance) to control the account. Then, the minor is the sole owner of the funds.

What to watch for: You’ll need to open a $5 savings account to become a member of Bethpage Federal Credit Union. Also, the high APY only applies on the first $1,000 that you have in your Bethpage Young Adult Savings.

Minors usually need an adult to open an account

Teenagers under age 18 will probably need a parent or guardian to open a savings account. It can be a good thing to have an adult teaching you about banking best practices.

Bottom line

It’s important to get in the habit of saving at a young age. Make saving fun by focusing on your savings goal, like a spring break fund or saving for a car.

Combine a student checking account with one of the best savings accounts for teenagers to manage all of their banking needs.

Featured image by PhotoInc of Getty Images

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