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Setting Up A Child Savings Account To Prepare For Your Kids Future

If your kid got a bunch of cash from your friends and family just for being born, you could keep it all in your checking account, where it’s perfectly safe as far as they know. Or you could do the financially sound thing and set up a child savings account in their name. Assuming it’s been a minute since you set up your own, LearnVest has a comprehensive checklist of everything you’ll need to do before throwing the kid’s first payday into the nearest bank branch. However, the longer that new baby cash lingers in your pocket the more likely you are to spend it on a much needed stiff drink, so here’s the abridged version.

Step 1: Identify Your Options And Narrow Your Choices
Who banks in a bank these days? Just do it online! Or not. Do you, man, but know your options — big commercial bank, online bank, community bank, or credit union — and the pros and cons. Hit up Better Business Bureau,, and, where you can compare interest rates and benefits of traditional savings accounts, money market accounts, and certificates of deposits at different institutions. As you narrow it down, consider proximity of branches and ATMs, because you’re on the hook for cash runs until the kid turns 17.

Flickr / Ken Teegardin

Step 2: Identify Key Features
That nest egg starter is great, but Junior’s not earning their keep any time soon, so a checking account requiring a minimum balance is probably a poor choice. You also want free checking, no transfer fees, and no ATM fees. For savings accounts, you want high APY, ability to subdivide accounts, and a minimum opening balance that Grandma’s first birthday check can bear.

Step 3: Hone In On The Details
You’ve narrowed your choices, now make sure the banks are all FDIC- or NCUSIF-insured. No, you don’t have to know what those stand for, just that they’re protecting Junior’s cash. You also want to confirm what type of overdraft protection you’ll get, because that’s bound to happen, and find out about things like new account bonuses and other banking products you might be able to get at a discount. That college loan is closer than you think.

Step 4: Get Online
You might refuse to bank online, but tellers will be obsolete by the time your kid’s ready to access their cash. Find out what’s offered in terms of online bill pay, transfers, and such so your kid doesn’t have to deal with any pesky face-to-face human interactions. So 20th century, bro.

Step 5: Open ‘Er Up!
There are a few requirements you’ll have to fulfill to legally open the account, but yeah, man, you did it. Actually, there’s one last step: pinch a 20 off the top and go buy yourself that cold one. Consider it baby’s first tax day.