Raising Money-Smart Kids

Best Banks for Families with Kids

Parents and children alike benefit from low fees and minimums on these accounts. But some features can be limited.

Best: Capital One

www.capitalone.com

Why it won: A dedicated checking account for teens and a suite of strong accounts for parents make Capital One a great choice for the whole family.

Standout accounts: Parents and kids can manage the free MONEY Teen Checking account together. The no-fee 360 Performance Savings account recently yielded 0.7%. 

Where it is: Accounts are internet-based. But for in-person services, Capital One has more than 300 branches in several eastern and southern states and Washington, D.C. 

Capital One’s MONEY Teen Checking account (0.1% yield) has no monthly fee or minimum-balance requirement and is available to children 8 years old and older with a parent or guardian as a joint holder. For those younger than 18, total debit card purchases and withdrawals are limited to $500 per day, and account holders can’t use the card at certain establishments, such as car-rental companies, bars and liquor stores. (Check-writing is not available.)  

Adults have a nice set of account choices from Capital One, too. The free 360 Checking account yields 0.1% and offers access to your paycheck up to two days early. Last year, Capital One eliminated all p=[. 

360 Performance Savings offers a high, 0.7% yield, and Kids Savings has a 0.3% rate. CDs require no minimum balance, and yields recently included 1.3% for a one-year term and 2.5% for five years. 

Runner-up: Discover Bank

www.discover.com

Why it won: Discover keeps fees to a minimum—a valuable feature for young account owners. 

Standout accounts: The Cashback Debit account offers cash back on debit card purchases. The Online Savings Account yields 0.7%. 

The Cashback Debit checking account from Discover’s online bank is unavailable to those younger than 18, but it makes a lot of sense for college students or other young people getting a start with banking—and it’s a great account for adults of other ages, too. You earn 1% cash back on up to $3,000 in debit card purchases monthly, and standard checks, cashier’s checks and overdraft transfers are free; the only fee the account charges is $30 for outgoing wire transfers. Direct deposits are available up to two days early. 

Discover’s free savings account yields 0.7%, and the money market account yields 0.6% on balances of less than $100,000 and 0.65% on the entire balance of $100,000 or more. CDs ($2,500 minimum deposit) recently offered 1.5% on a 12-month term and 2.75% on a five-year term. Parents can open custodial savings, money market and non-IRA CD accounts for their kids.

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