Dear Eliza,
My 15 year old son has been receiving monetary gifts from family and friends, as well as earning money helping a few neighbors over the summer. I want to open a savings account for him. Which type of savings account would you recommend?
I always get excited when I find out that parents and kids are working together on their financial independence path. Choosing banks have certainly become a game of finding the best rates and easy requirements. Having said that, if your son does not have a custodial Roth IRA, I recommend you read my post titled, Can I Open a Roth IRA for my Teen? How Do I Get Started? to open one TODAY. With earned income, he certainly needs to contribute to a Roth IRA as well.
A High Yield Savings Account (HYSA)*
A high yield savings account is a great choice for your son. A high yield savings account is a type of savings account that usually has higher interest than a traditional savings account. HYSA is a great finance tool because it will teach your son how to save at an early age. Some of the best high yield savings accounts have:
Read my post on high yield savings accounts: HYSA
*Remember, interest rates change, so be sure to check the bank’s website for information on interest rates and other rules before opening an account.
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