The Best Children’s Savings Accounts in Canada

Getting children to sign up with a bank is big business for the banks.  According to Bankrate.com, most adults have been with the same bank for the past 14 years, and millennials have been with the same primary bank for their chequing accounts for over a decade.  Here are the best children’s savings accounts in Canada.

People are loyal to their banks and don’t like much change.  Putting effort into enticing chequing and savings accounts for children will definitely reap dividends for the big Canadian banks.  I have been using the same chequing account since I started the BMO Plus Plan as a 12 year old.

That was well over 20 years ago!

I have since opened up several bank accounts to link to my main BMO chequing account to gain higher interest income for my savings, but my main chequing account is still BMO.

People are loyal to their banks, including myself.

Related: How Does a Savings Account Interest Work?

Why Should You Open Up a Kids Bank Account?

Well, as a new parent, you are probably overwhelmed with a lot of things including whether to take a 12 or 18 month parental leave, or how to setup an RESP and strategize your RESP, how to maximize your Canada Child Benefit.

Related: Canada Child Tax Benefit Payment Dates

Now you’re thinking you should open up a children’s bank account so you can put away the birthday money or gift money that your child receives and doesn’t understand yet.

In addition, you want to teach your child some money lessons, just like your parents did for you when you were a kid and got to visit the bank and update your very own banking passbook to see all that compound interest add up.

Whatever the reason, there are a few things to think about when you open up a bank account for your child.

Related: Justwealth vs Wealthsimple RESP

What to Look for in a Kids Chequing and Savings Account

There are a few things to look for when you are opening up a savings or chequing account for your child.  As a new parent, you’re probably eager to open up a savings account for your newborn child to deposit any gift money available so you can set it aside, especially if you have already maxed out your RESP.

Even though it might be tempting, I personally wouldn’t recommend opening up a savings account for your newborn right now.  Instead, you can just set up a separate account within the bank accounts you use right now.

I only say this since the interest rates for children’s savings accounts are generally not as good for kids savings accounts compared to an adult’s savings account.  There are also not as good promotions for new chequing accounts such as a free iPad or $350 cash.

Another to thing to consider, is that when you open up a savings account for your kid, it’s probably going to be long term, so a bank account that transitions them when they are a younger child to a teenager, and then to a post secondary student should be considered.

Here is a list of things to consider when you are choosing a chequing or savings account for your child.

Things to consider in a Children’s Chequing and Savings Account are:

• Does the bank or credit union offer a good interest rate?
• Number of transactions allowed without having to pay a fee
• Other perks that children or youth would care about such as a free SPC card, or Scene Reward points
• Will the account roll over into a free post secondary student account when your child turns 19?
• Charges for ATM withdrawals from a different bank (as a teenager, when you’re out with your friends, many don’t really say “oh wait, I can’t withdraw cash from this bank, can we go walk 5 blocks over to the other bank so I can withdraw without a fee?”)
• Is there a good app or website with the bank?  This will be important as when your children get older and use their bank with their phone, they likely will rarely step into a branch simply because they are so advanced with their ability to access technology.
• Is there an accessible bank branch?  (I had a great time as a kid going to the bank and updating my little bank book, this is a teachable and role modelling moment)

How to Open Up a Kids Bank Account in Canada

To open up a bank account for your child, it’s pretty straight forward.

You will have to visit the bank branch and provide two pieces of ID (identification) for your child, such as a birth certificate, passport, or the British Columbia Services Card (if you live in B.C.).

You will also have to bring some ID for yourself (as the parent or legal guardian).  For the savings account with Tangerine bank, though, you don’t have to go into the branch, you just give the customer service a call but you will have to verify information digitally.

Here are some of the best banks for children’s savings accounts available in Canada:

BMO Plus Plan for Kids

• Free Plus Plan chequing account (normally $11.95/month)
• This BMO Youth account is geared towards children 12 years of age and under
• But it is also free for teens 13 to 18 and also free for students (you can see why I just stuck with this bank, no fees!)
• Zero minimum balance
• Unlimited Interac e-Transfer^® transactions
• 25 Transactions per month included
• Can add a free premium rate savings account (the rate is 0.010% though….Yes, the decimals are in the right place…)
• Non-BMO ATM withdrawal is $2 in Canada and $5 in US/ Internationally

If you’re just looking for a regular chequing account (not for kids), they have a BMO new account offer right now of $400 cash.

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RBC’s Leo Young Savers Account

• The Leo Young Savers Account is geared towards children age 0-12
• There’s an RBC Leo bank promotion where you get a $25 Bonus Offer when you open up a Leo Young Savers Account.
•  The $25 will be deposited in 2 to 8 weeks, and you don’t need to do any qualifying transactions to get the $25 for your child
• Zero monthly fee
• 15 free debits per month
• Can do a pre-authorized transfer from the parents
• Zero fee Interac e-Transfer^® transactions
• The interest rate is also 0.010%…
• After age 13, you can open up an RBC Youth Account, or the RBC No Limit Banking Student Package.  Right now, they are offering $60 when you open up a student account.  There is a $10.95 per month charge though, but this should be able to be waived with a certain minimum balance.  These bank promos are certainly not like getting RBC AirPods or $300 cash, but they are easy and low hanging fruit.
• I remember wishing my parents opened up an RBC Leo Account for me as a kid.  It seemed so cool.  RBC even has a Learn Money with Leo app you can download to teach your age 3-6 year old children about money.

 

CIBC Advantage for Youth Account

• CIBC Advantage for Youth Account is for Canadian residents 18 years of age or younger
• The CIBC Child Account or CIBC Youth Account has zero monthly fees
• $0 minimum
• Unlimited transactions
• Unlimited Interac e-Transfer^® transactions
• 0.15% Interest rate
• Free monthly paper statements
• Free SPC membership (a $10 value, you can use these at participating stores for student discounts)

Click here for more CIBC promotions (included getting up to $400 cash)

Canadian Tire High INterest Savings Account

• The Canadian Tire High Interest Savings Account has a very high interest rate, 3.00%
• It is for children 12 years of age or older
• You can also hold this account as a joint account with your child
• There is a $0 minimum balance
• There are zero monthly fees
• For more information, here’s a Canadian Tire High Interest Savings Account review

Scotiabank Getting There SavIngs Program For Youth Account

• Scotiabank Getting There Savings Program For Youth Account is for children 18 years of age or younger
• The Scotiabank Youth Account has zero monthly fee
• $0 minimum
• Unlimited debit transactions
• 2 free Interac e-Transfer^® transactions per month
• Earn 0.05% interest on deposits up to $499.99 and 0.10% interest on $500 or more
• For children 14 years of age and older, they can pick between Scotia Rewards or SCENE Rewards points
• Children 16 years or younger need to have a parent with them to open up a Scotiabank youth account
• After your child goes to post secondary, they can open up a free Scotiabank Student Banking Advantage Plan and get 5000 SCENE Rewards  or Scotia Rewards Points

Tangerine Children’s Savings Account

• The Tangerine Children’s Savings Account has one of the highest interest rate out of the available kids savings accounts which is, 0.35%
• Zero monthly fee
• $0 minimum
• Unlimited transactions (zero fees)
• Your child gets their own Tangerine login (Client Number) and they can see their transaction history and compound interest accrued online
• To open up a Tangerine Children’s Savings Account, the parent or legal guardian must also have a Tangerine account and then you call 1-888-826-4374 after you have your adult account set up.
•  The Tangerine Children’s Savings Account is basically a Tangerine joint account between the parent or guardian and the child… and the child is the primary account holder

TD  Youth Savings Account

• TD Youth Savings Account is for children 18 years and under
• Zero monthly fee
• $0 minimum
• 0.01% interest rate
• $0.50 for up to a $100 Interac e-Transfer^® 
• $1.00 for a quantity over $100 Interac e-Transfer^® 
• With the TD Youth Account, you can do a pre-authorized transfer from parents or a do a Simply Save Program (add $0.50 to $5.00 per transaction on debit card to savings)

In addition to big banks, the best children’s savings accounts in Canada can include credit unions.  Credit unions are also an option for your children’s first bank account or savings account.  Credit Unions are typically more specific to your own province (e.g. if you open up a Vancity account, you have to be a B.C. resident) so there are a number of them available.

My husband’s first bank account as a kid was with a credit union (Vancity Credit Union) and he also had fond memories of going to the bank with his dad.

CWB Youth Account

• CWB (Canadian Western Bank) Youth Account has zero fees
• Zero minimum balance needed
• Unlimited transactions
• $1.00 for each Interac e-Transfer^® 
• Free to withdraw from any The EXCHANGE network ATM (and $1.50 from a Non EXCHANGE Network ATM).  Basically most credit unions are under this network and also HSBC Bank.
• Interest rate is 0.050% for deposits under $500 and 0.50% for deposits over $500 (this is pretty good!)
• Located in the western provinces of Canada

Westminster Savings Junior Account

• The Westminister Savings Junior Account is also zero fee
• For children 18 years of age and younger
• 2 free debits monthly
• Free monthly statements
• To open an account, you must visit a branch (they are only in B.C.) and your child must be able to sign their name
• You get $10 put into a savings account, $10 put into a spending account, and $10 donated to a charity:  Special Olympics BC, Arts Umbrella, and KidSport BC
• The parent/ guardian must have joint account set up if your child is 11 years old or younger
• The interest rate looks like it might be 0.25% at the time of writing

Alterna Bank Youth Start Package

• The Alterna Bank Youth start package has zero fees
• 30 free day to day transactions per month which includes Interac e-Transfer^® 
• You can do monthly, quarterly, or annual statements via estatements or mailed to you
• For children age 18 and under
• The branches are in Ontario

Children’s Bank Account Summary

So what’s the best bank to open savings account for your child?  There are definitely lots of options to choose from when you are picking a bank account for your children.

As mentioned, it depends, and you have to also think long term.  For example, your eight year old child right now may not be sending transfers to their friends but in a few years they might be.

Teenagers may be using a lot of Interac e-Transfers^®  when sending money back and forth to their friends.  They don’t think about the fees that can add up, they are busy thinking about other things that are more important to them, like their high school crush.  They also might be interested in earning points for movies rather than points towards travel.

Also, it’s a good idea to see whether these chequing and savings accounts roll over into free student bank accounts if they aren’t going to be maintaining a minimum balance of a few thousand dollars to meet the fee waiver.

In summary though, as you can see, most of these accounts have abysmal interest rates.

What we ended up doing for our kids gift money and birthday money and extra money that couldn’t go into the Family RESP we set up for them is we opened an additional 360 days MomentumPLUS account where you can add a savings account in our joint Scotiabank Preferred Package account. 

Give your savings even more of a boost – Earn up to 5.60% interest for a limited time on your Momentum^PLUS Savings Account² with the Ultimate Package or a 5.65% interest rate with the Prefered Package.

The Momentum Plus Savings at the time of writing currently gives an additional 0.05% rate (or an additional 0.10% rate if you have a Scotiabank Ultimate Package), and it is paid out at the end of each month (the longer you hold it in there, the more interest gets paid out).  Basically we didn’t want to bother opening up another account so we just added another ‘pot’ for our kids gift money.  We labelled one for Education and another for Other.  The downside to this is you can’t customize the labels some more.

Related: Best High Interest Joint Accounts in Canada

You could probably do this with any other joint account, just open up an additional account that offers interest income more than the measly 0.050% many banks are offering, but just make sure you label it properly so you know which one is your child’s special savings account.

Later on, when our children are old enough to use a bank account and have a bank card, or when they are old enough to deposit their own hard earned money, we will start one of the above accounts for them so they can go to a physical branch or see their money compounding over time online.

Hope you found this post on the best children’s savings accounts in Canada useful!

Check this link out for the rest of the financial checklist for new parents in Canada.

Parents, which bank did you choose for your children?  

Is it just me, or have you also kept banking with the same bank since you were a kid?

Do you have any tips on how to teach your children about banking basics?

You may also be interested in:

• Canada Child Benefit Amount