Best Savings Accounts for Kids 2021: Best Places to Grow Your Child's Money

With Chinese New Year fast approaching, it means that it’s time to wrap some angpaos if you’re a parent.

But you’re a parent, this also means that your damage is not that huge because… Your money will be re-routed into your children’s pockets instead.

If you’re looking for somewhere to place your child’s money, why not look into starting a savings account for them?

Kids Savings Account vs Child Development Account (CDA)

You might be familiar with the Child Development Account (CDA), which is a special savings account which provides government matching to savings, grants and cash gifts which can be spent on approved uses.

It can be opened at POSB/DBS, OCBC or UOB.

The CDA can be used to offset baby expenses including, but are not limited to:

• Child Care Centres
• Kindergartens
• Special Education Schools
• Providers of Early Intervention Programmes
• Providers of Assistive Technological Devices
• Medical-related Expenses (eg. Approved Vaccinations at Polyclinics)
• MediShield or Medisave-approved Private Integrated Plans

Here are two main differences between a kid’s savings account and CDA:

1) You Cannot Withdraw From CDA

As mentioned above, CDA is primarily used for baby expenses including education and medical expenses.

As they are to be spent on these approved uses, these funds cannot be withdrawn from the account.

On the other hand, placing your child’s money in a savings account allows your child to have funds that are liquid for other expenses.

2) CDA Closure at 13 Years Old

When your child turns 13 years old, the CDA will be closed and any leftover amount from the CDA will be transferred to the Post-Secondary Education Account (PSEA).

As for kids savings accounts, they can be converted conveniently into regular savings accounts when they reach certain age limits.

Which means that if you’re looking for a savings account for your child to have beyond 13 years old, it would be better to have one separate account with one of these banks.

Why You Should Open a Savings Account for Your Child

We know that habits are best built when they are started young.

As parents, we would definitely want to give your children a head start with financial literacy and pick up personal finance habits.

Having their own savings account could not only teach your child the concept of money but also encourage him/her to pick up healthy saving habits, and even learn about delayed gratification.

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TL:DR: Best Savings Accounts for Kids 2021: Best Places to Grow Your Child’s Money

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CIMB Junior Savers Account

Interest Rates:

Minimum initial deposit: $1,000 (min. amount to earn interest as well)

Fall-below fee: N/A

Age limit: 12 years old

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Citibank Junior Savings Account

Interest Rates:

Minimum initial deposit: N/A

Fall-below fee: N/A ($15 if the parent is also a Citibank account holder and total account balance is below $15,000)

Age limit: 18 years old

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Maybank Youngstarz Account

Interest Rates:

Minimum initial deposit: $10

Fall-below fee: N/A

Age limit: Below 16 years old

Benefits:

• Hand, Foot & Mouth Disease Hospitalisation and Outpatient Insurance if the account maintains a minimum deposit of $5,000. Payout is based on a daily hospitalisation cash benefit of S$100, up to a maximum of 25 days per year)
• Worldwide Personal Accident Insurance coverage for parent and child. Eligibility is based on maintaining a minimum deposit of S$5,000 in the Youngstarz Savings Account, with lump sum payout of S$15,000

There is also Maybank Family Plus which allows up to 3 times of interest rates if different requirements are met.

This includes:

Do note that the parent has to be an iSAVvy Savings account holder, and own the Maybank Family & Friends card for additional interest.

 

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OCBC Mighty Savers Account

Interest Rates:

The OCBC Mighty Savers Account offers up to 0.20% p.a., depending on the criteria.

Minimum initial deposit: N/A

Fall-below fee: N/A

Age limit: Below 16 years old

Benefits:

• Children can enjoy Mighty Savers^® Fast Track at any “Sunday at OCBC” branch
• Free coin deposits

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POSB My Account

Interest Rates:

Minimum initial deposit: N/A

Fall-below fee: N/A ($2 account fee is waived till 16 years old)

Age limit: N/A

Benefits:

• Complimentary POPULAR 1-year student membership
• Can be used with POSB Smart Buddy

POSB Smart Buddy is an in-school savings and payments wearable, and it allows the child to tap to pay in school and at selected merchants.

It also allows parents to do auto-transfer of savings to the account and monitor expenses.

It can also help the child develop budgeting and savings habits, and also track fitness levels.

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Standard Chartered e$aver Kids Account

Interest Rates:

Minimum initial deposit: N/A

Fall-below fee: N/A

Age limit: Below 18 years old

Do note that a monthly deposit of minimum $50 (via GIRO or Standing Instruction Form) is required into this account.

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UOB Junior Savers Account

Interest Rates:

Minimum initial deposit: $500

Fall-below fee: $2 if balance is below $500

Age limit: Below 16 years old

Benefits:

• Free insurance coverage with an average daily balance of $3,000 a month (over past 6 months or since account is open, whichever period is shorter)

Note: Insurance covers the insured till age 65 or upon the child reaching 17 years old, whichever comes first

Other Considerations When Choosing the Best Savings Account for Your Child

Besides looking at the interest rates, here are some other considerations to think about when you’re choosing your child’s savings account.

• Which bank account is linked to your child’s CDA (some banks offer additional benefits for this)
• Which savings account you commonly use (application process would be easier for existing customers, additional benefits for stacked accounts)
• Age limit and account service fees

Still deciding which account is the best for your kid? Why not check out what the other parents might be doing at Seedly!