Avoid These Children’s Savings Accounts in 2025

As parents, we all want to secure a bright financial future for our children. Savings accounts designed specifically for kids can be a great way to start building their financial foundation—but not all accounts are created equal. In 2025, some options may come with hidden fees, poor interest rates, or restrictive terms that could do more harm than good. To help you make an informed decision, we’ve compiled a list of children’s savings accounts you should avoid.

High-Fee Accounts That Erode Savings

Some banks market children’s savings accounts with appealing features but bury excessive fees in the fine print. Monthly maintenance fees, withdrawal penalties, and inactivity charges can slowly chip away at your child’s savings over time. Before opening an account, scrutinize the fee structure—ideally, opt for accounts with no monthly fees and minimal transaction costs.

Low-Interest Accounts That Offer Minimal Growth

With inflation affecting purchasing power, a savings account that offers a meager interest rate (e.g., 0.01% APY) is hardly worth considering. These accounts may keep your child’s money “safe,” but they won’t help it grow. Instead, look for high-yield savings accounts or even consider alternatives like custodial investment accounts for long-term growth potential.

Accounts With Heavy Restrictions

Some financial institutions impose strict limitations on withdrawals, deposits, or account access until the child reaches a certain age. While some oversight is reasonable, overly restrictive accounts can make it difficult for parents to manage funds effectively. Always review the terms to ensure flexibility when needed.

The Bottom Line

Not all children’s savings accounts are beneficial. In 2025, prioritize options with no hidden fees, competitive interest rates, and reasonable flexibility. By avoiding the pitfalls of subpar accounts, you can ensure that your child’s savings grow steadily and securely over time.

Have you encountered any disappointing children’s savings accounts? Share your experiences in the comments below!