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10% Savings Account for Kids

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Affinity Bank is offering the Kids Only Savings Account with a rate of 10% APY on all balances up to $500. The minimum deposit required is only $1. Balances over $500 earn the Gold Savings rate which is currently 0.40% for balances under $5K. Your child must be no older than 16, and the adult must have or open an account with Affinity Bank. The free checking account may be a good choice for the adult. It only requires $100 to open.

This seems like a good way to teach the value of savings to kids. With 10% interest, a savings of $500 will earn $50 over a year which is $30 more than what you would make at EmigrantDirect (assuming no rate changes).

Affinity Bank provides online banking and you can start the account opening process online, but it requires mailing in the application and deposit check. You can also visit the bank's branches which are in several California cities including Ventura, Camarillo, San Francisco and Irvine.

Credit for finding this deal goes to Andrea. More discussion about this account is available at this SavingAdvice thread.
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andrea in minnesota
  |     |   Comment #1
Actually, credit for this info should go to me since I had written about this in an earlier comment about a month or so ago. But I'm glad that you mention this deal now - we have opened three of those accounts and put the maximum in which is a great return for the kids. - By the way, I thoroughly enjoy your site - it's just my wavelength. Thanks!
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Banking Guy
  |     |   Comment #2
Thanks Andrea. Yes, you're right. It was the comment that you left in this post. Looks like it took the SavingAdvice thread for me to really appreciate the value of this deal, and by that time I had forgotten about the comment. Sorry about the lapse, and thanks for your inputs!
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Anonymous
  |     |   Comment #3
Link to savingadvice thread is broken.
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Anonymous
  |     |   Comment #4
I opened Affinity Savings Accounts for my kids. I'm out of state and it was a really easy process opening them up. The 10% rate makes it easy for the kids to figure out what their $500 will be worth in a year and gives them incentive to not spend it on junk. They were each promptly sent a piggy bank as a gift. Thanks for posting this one.
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Banking Guy
  |     |   Comment #5
Thanks for the info. Glad to see they're still offering this account. 10% of $500 is a nice $50 which should be a good lesson about interest.
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Anonymous
  |     |   Comment #6
Question: If the balance is over $500, will I get the low rate on ALL money or just the amount above $500? If the rate drops on ALL, then I should only put it $444.44 and get the $45.45 interest and then move the out of the account.

Is this correct, or will it still pay $50 plus the low rate on the total above $500?
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Anonymous
  |     |   Comment #7
You can no longer use the free checking account to allow you to open the kid's savings account. You must open a gold checking account which requires a $1000 minimum to avoid monthly fees. Good freestanding kid's accounts are almost impossible to find but this should come as no surprise in a nation of non-savers.
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Banking Guy
  |     |   Comment #8
Thanks for the info. The Gold checking requirement definitely hurts this deal.
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Anonymous
  |     |   Comment #9
My kids both have a 10% APY account, but I also got the letter in the mail last week about needing to convert from my existing free checking to a "gold" checking and maintain $1,000 min. balance. The letter states I have until 6/30/07 to change over. With the loss of interest on the $1,000 account, it's not worth maintaining the kids accounts, so I'll be withdrawing all $ by 6/30. Too bad since this would have been a nice way to encourage kids to save.
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Philip
  |     |   Comment #10
The web page has been updated to indicate that this offer is no longer valid to those outside of California.
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Banking Guy
  |     |   Comment #11
Thanks for the update. Also they now state a branch visit is required. Sorry to see them put in these restrictions.
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Anonymous
  |     |   Comment #12
Getting kids to safe is half the battle. There are plenty of accounts that are available for kids. You can find a few at www.interestsavingsaccount.net . Getting kids to save can get them on the right path early.
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Anonymous
  |     |   Comment #13
Getting kids to safe is half the battle. There are plenty of accounts that are available for kids. You can find a few at interestsavingsaccount.net . Getting kids to save can get them on the right path early.
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savings account
  |     |   Comment #14
Its nice to hear the discount in kids savings account. The thread link is not working. You need to fix it.
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