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Best Bank Account for Kids?

POSTED ON BY

Young Americans Bank in Denver was on Kiplinger's list for the best accounts for kids. This is the first time I've noticed this bank. I went over to the bank's website, and looked around. According to the bank:

Young Americans Bank in Denver, Colorado, is the only bank in the entire world specifically designed for young people ages 21 and younger.

I couldn't find any mention of interest rates at the bank's website. According to Kiplinger:

It takes just $10 to open a savings account (an adult must cosign) that earns 0.1%. An ATM card costs $5 annually, and you can make two free withdrawals a month.

That doesn't sound appealing to me. If you're going to offer an account for kids, why not have a high interest rate with a balance cap? For example, why not 5% for the first $500? Or at least offer something that comes close to internet savings account rates. That would make earning interest a little more fun. And why have an annual ATM card fee?

Here's how Young Americans Bank describes interest in the savings account page:

Money in a savings account grows because it earns interest. For example, if you deposit $10 into a savings account that earns 2% interest, in 5 years you will have $11.05!

Based on Kiplinger's information, here is what it should say:

So if you deposit $10 into a savings account that earns 0.10% interest, in 5 years you will have $10.05!

Watching $10 grow into $10.05 over 5 years doesn't sound fun to me.

Young Americans Bank does open accounts for those outside of Colorado. According to its How to Open an Account page, the sponsoring adult needs to mail in a copy of a photo ID. I don't see any application to print out.

The bank has been a FDIC member since 1987 (FDIC Certificate # 27010). It's a small bank with just $12.94 million in deposits. Please refer to our financial overview for Young Americans Bank for more details.

In my opinion, there are many better options for kid bank accounts. I'll cover some of these soon. If you have any recommendations, please leave a comment.

  Tags: savings account, Young Americans Bank

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Comments
7 comments.
Comment #1 by A C (anonymous) posted on
A C
can't wait to hear your opinions on kids banking. My son currently has $200 saved up (he is only 8) and my husband wants him to put the money in a bank. But it's hard to explain about letting his money grow when the interest is SO LOW! He is not sold on banking yet, he likes the idea of cash though he doesn't like spending it.

4
Comment #2 by tightwad posted on
tightwad
I used to enjoy Kiplingers...Now some of the writers seem to just phone in articles with whatever crappy info they can find at bankrate.com. 0.1% interest is just terrible and should not even take up page space. Even in my small town most banks and credit unions have "kids club" capped accounts that pay much more.

10
Comment #3 by Anonymous posted on
Anonymous
I HAVE LEARNED THAT...  MOST WELL SOME BANKS WILL ALLOW YOU TO OPEN A KIDS SAVINGS ACCT AS LONG AS THEIR IS AN ADULT LISTED ON ACCOUNT... OUR KIDS HAVE THEIR ACCOUNTS WITH ING DIRECT....AND THAY REPORT INTREST UNDER THEIR SS NUMBER... THE ONLY WAY WE GET THEIR MONEY INTO THERE ACCOUNTS IS BY DEPOSITING THE MONEY INTO OUR LINKED ACH CHECKING ACCT AT A LOCAL BANK...

2
Comment #4 by Anonymous posted on
Anonymous
I opened a savings account for my kid (by being me as the joint account holder for my minor kid), to get an advantage of CD few years back.

Each year that credit union sends a Birthday greeting with a $5 free bonus credit if we deposit the kid's birthday gift money into that credit union. I usually add at aleast 5 to 10 dollars so that I can get that bonus ..

Beyond this, I didnt see anything specific for the kid in that account

1
Comment #5 by Jean (anonymous) posted on
Jean
I think it'll be hard to find a bank with better accounts and services for kids than Capital Communications Federal Credit Union.  There are Great Grades and Reading Programs, as well as special certificates called "CertifiKids" that you or your child can make deposits to.  There is also a comprehensive College Bound program for families.  I am biased because I work there, but you can check it out for yourselves. 

https://web.capcomfcu.org/personal/kids.html

https://web.capcomfcu.org/personal/college-bound.html

And, if you live or work in the Capital Region of New York State, you are probably already eligible to join.

2
Comment #6 by Julio (anonymous) posted on
Julio
Correction, If you deposit $10 into a savings account that earns 0.10% interest AND charges $5 a yr for an ATM card, in 5 years you will owe the bank at least $15, that is if they don't start charging you a fee for having a zero balance after the second year.

 

What a great account to teach our children how big banks rip you off.

4
Comment #7 by Anonymous posted on
Anonymous
DONT BANK HERE! Have had problems for years with my online acocunt. I have had a few occasions where money simply went missing from my account. not show of a transaction so they wont do anything. I came to YAB when I joined a program called BTG. (also avoid them, lost my work contract. refused to pay me for weeks. payed me less than they were supposed to etc. etc.)This bank has been nothing but a hassle since day 1. and the matching funds have limits of 3,000 dollars matching over your time there. not 10,000 (1,000 per year) that they offer you. They wont tell you that. Money takes a long times to post. overall I would rate this bank a -5.

1