Best Savings Accounts for Kids in 2026: Custodial, Joint and Online Banks Compared

The best savings account for your kid depends less on the bank's logo than on how the account is set up. Two accounts with the same interest rate can have opposite answers to who owns the money, who can take it out, and what happens at 18. Start with the structure, then compare banks.

The three ways a kid's savings account can be set up

A custodial account is the strongest promise to your child: the money is legally theirs. A joint account is more flexible but gives your kid equal rights, and gives you equal rights too. The custodial rules are the same ones that govern a UTMA investment account, and the transfer age for your state is in the 50-state table.

How big banks and online banks compare

These are the non-rate features as each bank describes them, checked in October 2026. Rates change often, so compare the current APY on each bank's site before you open anything.

Some online banks don't serve minors at all. Marcus and SoFi require account owners to be 18 and don't offer custodial accounts.

Can a kid have a high-yield savings account?

Usually not in their own name. Most online banks, where high-yield accounts are common, require owners to be 18. The way in is a custodial version opened by an adult, which banks such as Ally and CIT offer. Some joint kids' accounts at traditional banks pay interest too, so compare the current rate on any account you're considering.

What about credit unions?

Credit unions often have youth savings accounts, usually joint with an adult member until the child turns 18. Navy Federal, for example, offers youth membership to the children and grandchildren of members with a $5 share deposit. Credit union deposits are insured by the NCUA on the same $250,000 basis as FDIC bank deposits.

Is the money insured?

At an FDIC bank, deposits are insured up to $250,000 per depositor, per bank, per ownership category. A UTMA account is insured as the child's own account, separate from the custodian's accounts. Each co-owner of a joint account is covered up to $250,000 across their joint accounts at that bank.

Kids' debit and savings apps work differently. Companies like Greenlight and BusyKid aren't banks. They keep customer money at a partner bank, and FDIC coverage only passes through when that bank's records are set up correctly. Insurance also doesn't cover the app company itself failing. Some of these apps pay a "savings reward" or a parent-funded match rather than bank interest, and most charge a monthly or yearly fee. The kids' apps comparison covers how they differ, and how to judge an app's safety has a checklist.

Taxes and financial aid

• Taxes. Interest in a custodial account is your child's income. For 2026, the first $1,350 of a child's investment income is tax-free, the next $1,350 is taxed at the child's rate, and anything above $2,700 can be taxed at yours under the kiddie tax. Interest on a typical kid's balance rarely gets close.
• Financial aid. The FAFSA counts a custodial account as the student's asset, assessed at 20% a year. A parent's own savings is assessed at about 5.64% at most. See how custodial accounts affect aid.

When a savings account is the right tool

A savings account fits money your child will use within a few years: a bike, a trip, a first car, or learning to save toward a goal. For money that should never drop in value, savings bonds are another option. For money that won't be touched for a decade or more, interest usually trails what invested money has historically earned. That's where a 529, a custodial brokerage account or a custodial Roth IRA come in. If a grandparent is opening the account, see opening a savings account for a grandchild.

Where MemoryBank fits

Many families end up with a kid's savings account at one bank and investment accounts somewhere else. MemoryBank connects the accounts you've already opened, savings included, and shows your child one view of everything that's theirs.

Account features and fees are as each bank described them in October 2026 and can change; confirm current terms with the bank. MemoryBank isn't affiliated with any bank listed and doesn't recommend one. MemoryBank is not a brokerage. It cannot receive, keep or transfer securities. For tax or financial-aid questions, talk with a tax professional or financial advisor.

Frequently asked questions

What is the best savings account for a kid?

It depends on the setup you want. A custodial (UTMA/UGMA) savings account makes the money legally the child's, a joint account gives parent and child equal access, and a parent-owned account keeps full control with the parent. Within each setup, compare fees, minimums, whether the kid gets their own login, and the current interest rate.

Can a minor open a savings account?

Not alone at most banks. An adult opens either a custodial account, where the adult manages the child's money, or a joint account with the child. Some banks let teens 13 and older be joint owners.

Can a child have a high-yield savings account?

Usually through a custodial version opened by an adult. Most online banks require account owners to be 18, but some, such as Ally and CIT, offer custodial UTMA/UGMA savings accounts. Marcus and SoFi don't offer accounts to minors.

What is the difference between a custodial and a joint savings account for a child?

In a custodial account the child legally owns the money, deposits can't be taken back, and the custodian must turn it over at the state's transfer age. In a joint account both owners have equal rights to the money, so either one can withdraw, and the account usually stays joint after 18.

Is a kid's savings account FDIC insured?

At an FDIC-insured bank, yes. A custodial account is insured as the child's own account up to $250,000, separate from the custodian's accounts. Kids' money apps that aren't banks rely on pass-through insurance at a partner bank, which doesn't protect against the app company itself failing.

Do kids pay taxes on savings account interest?

Interest in an account the child owns is the child's income. For 2026, the first $1,350 of a child's investment income is tax-free and the next $1,350 is taxed at the child's rate; above $2,700, the kiddie tax can apply the parent's rate.

What to do next

1. Decide whether the money should be your child's (custodial) or shared (joint).
2. Check your state's custodial transfer age if you're leaning custodial.
3. Compare current rates and fees at two or three banks with the setup you picked.