When your child is ready to graduate from piggy bank to real bank, you’ll want to look for an account that doesn’t eat into those initial deposits of loonies, toonies and birthday money with a bunch of bewildering fees. There are many options for your young saver that allow them to watch their money grow, without charging an arm and a leg for each withdrawal, deposit and e-transfer.
“Many of the banks in this country have accounts for your kid’s first savings account—and they’ll have great features such as no monthly fees, and unlimited free transactions,” says Melissa Leong, author of the award-winning finance guide Happy Go Money and a mother of two. This is important because you don’t want your child’s first money lessons to include a lecture about minimizing unnecessary charges, Leong says.
Although our children will definitely bank digitally and go cashless more than previous generations, she believes there is still great value in taking your kids into an actual bank. The tactile experience of handing over money and seeing a new, higher total on their statement “helps them appreciate that money should be earned and saved.”
“I have the fondest memories of going to the bank with my deposits,” Leong recalls. “I’d see the value of my account rising and I felt extremely proud. I also appreciated being treated like I was someone important. The account was in my name. The bank associate addressed his questions to me. It reinforced the idea that I was doing something worthwhile.”
Unfortunately, the no-fee structure of children’s bank accounts comes with a tradeoff: lower interest rates than those of a high interest savings account, explains Leong. “You’ll have to turn to one of Canada’s online banks for a higher rate among youth savings accounts,” she says.
If you decide to go with an online bank, Leong recommends trying to make the process as tangible as possible by printing out monthly statements and discussing your kid’s progress. “Talk about what she could be saving for and perhaps how long it might take to reach that goal,” suggests Leong.
Here’s a breakdown of some of the top kids’ bank accounts available in Canada and what they have to offer.
The best kids bank accounts in Canada
RBC Leo’s Young Savers Account
This account’s stand-out feature is a $25 sign-up bonus that gives your little one’s savings a boost. Interac e-Transfers are free but debit transactions are capped at 15 per month. RBC says this account is ideal for kids 13 and under. Teens may prefer to switch to a student account with more free transactions.