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What is a Kids' Bank Account?

By Tiffany Manley
Updated: May 17, 2024

A kids’ bank account is a fun way for children to learn about budgeting, saving money and how the banking system works. As with anything else, children must be taught how to handle their money responsibly. Teaching them the virtues of saving, spending wisely and how to search for the best bank account for their needs are ways to maximize the benefit of a kids’ bank account. Many savings and loan institutions offer them, and they usually have low minimum balance restrictions and deposit amounts. Some even offer great interest rates.

Many children are bombarded with advertisements almost from the moment they wake up until the moment they go to sleep. This is one reason that it is so vital to teach children the importance of saving their money and budgeting for its proper use. Parents can do a great deal to teach their children how to budget properly, shop around for the best price and how to make other financially responsible decisions. Banking institutions are an everyday part of most people’s lives, so it is important for a child to know how to use a bank account responsibly and to learn how to shop around for the best service and rates at various institutions.

One of the biggest attractions of a kids’ bank account for children is all of the fun stuff they might receive. Many banks include small toys, pens and stickers in the new account welcome packet. Kids also can look forward to receiving mail, such as bank statements, newsletters and birthday cards. Many banks have developed a theme and a mascot to coincide with their kids’ bank account programs. Some even offer quarterly drawings and special incentives on birthdays or when certain savings milestones have been reached.

Parents might appreciate the fun and easy manner a kids’ bank account affords them when it comes to teaching their children about responsible money handling. Many institutions offer parental literature to go along with a kids’ bank account in order to help the parents make sure they are doing everything they should when it comes to instructing their children about money. If the kids’ bank account is at the parents’ banking institution, the management of the account might be made easier as well.

Some banks even offer adolescent accounts. These accounts give the young account holder a debit card that gives him or her the freedom of a debit card but is preloaded by the parent with a certain amount of funds from the account. This teaches the young adult how to use a bank card properly without the possibility of overdraft fees piling up.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By BoatHugger — On Jun 14, 2011

The credit union that we use has an incentive to start kids on the right path to learning about finances. The child gets to open up a savings account and every time that they make all A’s and B’s, the bank puts five dollars into their account.

My daughter loves it. She walks right in the bank with her report card in hand and tells the teller that she would like five dollars deposited into her account. It is a great way to teach her finances and it is also a great incentive to make good grades. It is a win-win situation!

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