According to 2019's survey by BDO on Canadians Affordability Index, published on the Business Insider website, over half (53%) of Canadians continue to live paycheque to paycheque and debt remains overwhelming for 25%. Over a quarter of Canadians still don’t have enough money for their needs and only less than half have enough money to spend on what they want.
These statistics indicate how important financial education is for kids at an early age. And, one way to start teaching your child about money is by opening a bank account for them. Being a parent, this is one of the best gifts you can give to your child that will help them to get started on the right foot for financial success.
If your child is old enough and is ready to learn about banking, opening a Youth or Children's account is the best option. A Youth or Children's account is a bank account designed for individuals generally below the age of 18. Most of the banks in Canada have the option to open a Youth account. However, it's a good idea to go with a bank with no or low monthly fee and a reasonable number of transactions per month for free.
Here are our top picks for best Youth or Children's accounts based on factors like interest rate, monthly fee, minimum balance requirement, application requirement, transaction limit etc.
Best Bank Accounts for Children in Canada
- Tangerine - Children’s Savings Account (1.10%)
- CIBC - Advantage for Youth (0.15%)
- Scotiabank - Getting There Savings Program for Youth (tiered rate 0.05% to 0.10%)
- TD Bank - Youth Account (0.01%)
- RBC Royal Bank - Leo’s Young Savers Account (0.01%)
- Canadian Western Bank - Youth account (tiered rate 0.05% to 0.50%)
Tangerine - Children’s Savings Account (1.10%)
Tangerine offers a savings account designed for kids called Tangerine Children’s Savings Account. The account has an interest rate of 1.10% which is the highest among the youth accounts in Canada. They also come with perks like zero monthly fee, zero minimum balance, unlimited free transaction.
Your child will get their Client Number and log in so that they can check their transaction history and see their savings grow.
The account is available for any child aged 16 or less. Tangerine Children’s Savings Account can only be opened by a child's parent or legal guardian who has a Tangerine account. The account can be opened by phone only. Visit their website to get more details.
If you don't have a Tangerine account, you can sign up online to open an account and then add an account for your child. Please note, as a new customer you can get a promotional interest of 4.00% on your deposits for the first 5 months in your savings account (use promo code EARNMORE during sign up).
- An interest rate of 1.10% (highest in the market)
- Zero minimum balance
- No monthly fee
- Unlimited free transactions
- Separate login for child
CIBC - Advantage for Youth (0.05%)
CIBC offers a youth savings account called Advantage for Youth which comes with the benefits of an unlimited chequing account. They offer an interest rate of 0.05% on deposits. The interest is calculated daily based on the account closing balance and paid out monthly.
CIBC Advantage for Youth account has most of the convenience of a chequing account like zero monthly fees, no minimum balance, unlimited free transactions, free Interac e-Transfer etc. It also comes with its debit card, which can help you to teach your child on spending and money management.
A child can also sign on to CIBC online banking and mobile app with the consent of their parent or legal guardian. This will help them to check account balance, make cheque deposits or transfer money safely and securely. The account also comes with a free SPC membership for students.
Any Canadian resident of age 18 or younger can open a CIBC Advantage for Youth account. Accounts can be opened online or by visiting a branch.
After your child turns 19, CIBC Advantage for Youth automatically converts to the CIBC Premium Growth Account.
- 0.05% interest rate
- No monthly fee
- Zero minimum balance
- Unlimited transaction and unlimited Interac e-Transfer
- Debit card included
- Unlimited free CIBC ATM withdrawal (Non-CIBC ATM withdrawals cost $2 per transaction)
- Online and mobile banking
- Get a free SPC membership
Scotiabank - Getting There Savings Program for Youth (tiered rate 0.05% to 0.10%)
The youth account offered by Scotiabank is Getting There Savings Program for Youth. They offer a tiered interest rate that starts at 0.05% for deposits up to $499.99 and 0.10% on deposits of $500 or more. The account comes with zero monthly fee, unlimited debit transaction and 2 free Interac e-Transfer transactions per month.
If your kid is 14 years old or more, they can earn points on everyday purchases with their choice of rewards program. For little movie buffs, they can earn SCENE points which can be redeemed for entertainment rewards like movies, meals and more. Else, they can earn Scotia Reward points and redeem for travel, gift cards, the latest in tech, and more.
Getting There Savings Program for Youth account can be opened by visiting a Scotiabank branch. Youngsters under 16 must be joined by a parent or a legal guardian to open an account. The account is available to those aged 18 and younger.
- Tiered interest rate (0.05% to 0.10%)
- Zero monthly fee
- Unlimited debit transactions and 2 free Interac e-Transfer transactions per month
- Earn SCENE or Scotia Reward points
TD Bank - Youth Account (0.01%)
TD Youth Account is available for kids aged 18 or under. The account comes with zero monthly fees, no minimum balance and unlimited transactions (except Interac e-Transfer). This account offers an interest rate of 0.01%.
To open an account you need to visit a TD bank branch.
- An interest rate of 0.01%
- No minimum balance
- Zero monthly fee
- Unlimited transaction
- Interac e-Transfer fee $0.50 each up to $100, $1.00 each over that
- Automatic savings plan (Pre-Authorized Transfer Service or Simply Save Program)
- Non-TD ATM fee $2.00 each
RBC Royal Bank - Leo’s Young Savers Account (0.01%)
RBC Leo’s Young Savers Account is available for kids aged 12 or younger. The account comes with zero monthly fees, no minimum balance and an interest rate of 0.01%. It offers free unlimited Interac e-Transfer and 15 free debit transactions per month.
RBC is offering a promotional bonus amount of $25 for new customers of Leo’s Young Savers Account. To open an account, you need to visit an RBC Royal Bank branch.
- Zero monthly fee
- No minimum balance
- 0.01% interest rate
- Unlimited Interac e-Transfer
- 15 free debit transactions per month ($1.25 per debit after that)
- Non-RBC Royal Bank ATM transaction fee $2.00 each ($3.00 each on PLUS system)
- $25 bonus when you open a new account (Offer ends on February 1, 2021)
Canadian Western Bank - Youth account (tiered rate 0.05% to 0.50%)
Canadian Western Bank Youth account is built for youth aged 18 and under. The account offers a tiered interest rate starting at 0.05% for deposits up to $500 and 0.5% on deposits over $500. The account comes with no monthly fee and unlimited transactions.
You can connect with a CWB Relationship Manager to open a Youth Account.
- Tiered interest rate (0.05% up to deposits $500, 0.50% over $500)
- No monthly fee
- Unlimited transactions
- Interac e-Transfer fee $1.00 each
- Non-EXCHANGE Network ATM withdrawal fee $1.50 each
Others
Below is the list of few more banks that offer special accounts for kids.
- National Bank of Canada Youth Accounts - No monthly fee or minimum balance, available for kids 17 and under
- Laurentian Bank Youth Account - No monthly fee or minimum balance, available for kids 17 and under
How to open a kid's bank account in Canada?
The process of opening a Kids bank account can vary based on the financial institution you select. For some banks, you can open an account online whereas for some banks you and your kid need to visit a branch. But whatever the process is, you need at least below documents to open a kid's account.
- Your kids Social Insurance Number (SIN)
- At least one copy of their ID proof - generally passport or birth certificate will do
- Legal guardian’s details
You can open CIBC Advantage for Youth account online by visiting their official website. If you decide to open an account with Tangerine, you need to connect via phone. For all other banks mentioned in the above list, you and your child need to visit a bank branch to open an account. For children under seven years old, the parent maintains full control of the account as a trust account.
What to look for in a children's bank account?
While most of the parents choose to select the bank they are already using for their kid's account, it's always a good idea to shop around to make sure if there is any better option available. Below are the key features that you should look for.
Low Monthly Fee - Unlike most of the adult accounts where we use multiple financial products and services and end up paying for some monthly fee, kid's accounts are relatively simple and the main goal of it is to encourage savings and teach money management. Hence, you should always avoid paying any monthly service fees for your kid's account. Luckily, all the accounts mention in our list comes with zero monthly fees.
Minimum Balance - This one goes hand in hand with our previous point. Try to avoid any minimum balance requirement so that you don't have to pay extra charges if your kid accidentally dips into the account. Most of the Children's bank account come with zero minimum balance.
Interest Rate - Interest rate helps your kid to see how money in their account grows month by month. Having a good interest rate will help your kid to encourage saving than spending. In general, a kid's bank account does not come with a high-interest rate that you can expect in most of the High-Interest Savings Accounts. However, they are higher than any traditional savings account interest rate. Tangerine offers the highest interest rate of 0.35% for the kid's account.
Free Transaction - While most of the kid's account in Canada comes with an unlimited number of transactions per month, make sure to go through their entire fee structure to make sure there are no hidden charges. Some bank has a limitation on the number of free Interac e-Transfer per month.
Online and Mobile Banking - In this internet dominated age while the majority of the transactions take place digitally, having a good online banking and mobile banking option is essential. Checking the account activity has become simple and quick. It's more important for our kids since they tend to spend more time on the internet than ever.
Financial Education - Many kid's bank account comes with free financial education in the form of pamphlets, books, website materials or educational mobile games. This is not a deal-breaker but it's good to have the perk.
Is a kid's account right for you?
If a kid's account right for you or not depends on how the account will be used and what is the goal of the account. A kid's bank account can be a great option to teach your kid about money and giving them a sense of responsibility for the money they save.
However, if your goal is to save for kids education or future, you might want to receive the highest interest possible on your deposit. In that case, you will not want your kid to access the money before they reach a certain age and want to grow the money as much as possible. Opening a High-Interest Savings Account will be a perfect choice in this scenario. Opening a HISA in EQ Bank or Motive Financial can give you the highest return possible.
Related Article: Best High-Interest Saving Accounts in Canada
Conclusion
In conclusion, opening a kid's account is a very important step in your kid's life. How you teach your kids about handling money can help your kids to make the right money moves in the future. As a parent, this is the most valuable and rewarding lesson you can give to your kid.
This article should give you a basic understating of children's bank account and the best bank accounts that are available in Canada for kids. If you are still unsure, we recommend you visit your nearest bank branch or call them up to get more information.
