Best overall savings account for kids: Capital One

Capital One’s Kids Savings Account has all of the features you’d expect to see in a savings account for adults but with the additional feature of parental controls, which makes it a great overall solution for kids of all ages. The account earns 1.00% APY, has no monthly fees and can be opened with $0. You can set it up the account, and make your initial deposit at a later date.

The Kids Savings Account parental controls allows parents to sign into the account under their own usernames and passwords to help their children manage their funds. Parents always control transfers in and out of the account, offering good balance between independence for the young holder and parental oversight. Kids get to view their balance and watch their money grow.

Capital One lets you create an automatic savings plan linked with other accounts, so you can automatically transfer your child’s allowance into their Kids Savings Account. When it comes to geographical reach, Capital One has approximately 500 branch locations, as well as a great mobile banking app, which allows you to deposit checks and check balances.

Best savings account for college savings: Citizens Bank

If you want to be rewarded for consistent savings, the Citizens Bank CollegeSaver account has a bonus you might consider. If you open the account before your child is six and make a deposit of at least $25 each month until your child turns 18, Citizens Bank will give you a $1,000 bonus (the current account APY is a low 0.05%). You can also open this account if your child is between 6 and 12 years of age, but the minimum monthly deposit will be $50 and opening deposit is $500.

If you were to open the account today with an initial deposit of $25 upon the birth of a child (and assume the current APY held for 18 years), and then deposit $25 a month for 18 years, your $5,400 investment would accrue $24.48 in interest. Add the bonus and you’ll end up with $6,449.48. The bank doesn’t put any stipulations on how the money can be spent, so you can use the balance for college or any other financial needs.

Best savings account for a young child: PNC Bank

If you want to engage your child with educational tools, PNC’s S is for Savings account offers a lot. Granted, this account offers the lowest APY of the banks that made this list, but it makes up for it with its interactive online banking experience.

The Learning Center features Sesame Street characters that will help them learn basic money concepts. The site has fun activities you and your child can do together.

Features include the ability to set up automatic savings deposits that help them see the benefits of having a savings routine. Kids can work towards goals and learn about the three components of money: saving, sharing and spending. As your child gets older, you may choose to transfer their accumulated balance to a savings account at a bank that offers a higher interest rate.

Best savings account for teens: Alliant Credit Union

When your child turns 13, Alliant Credit Union considers them to be a young adult, offering their High-Rate Savings Account with a 1.70% APY and no monthly fees. For teens who want to set savings goals, the credit union allows them to set up supplemental accounts that can be earmarked for specific items, such as saving for a new car.

What makes this a great option for a teen is that Alliant also offers an interest-paying teen checking account for kids ages 13-17. The checking account earns an APY of 0.50%. The two accounts can be linked and both will earn your teen interest. Alliant also refunds up to $20 per month in ATM fees if the teen uses out-of-network machines.

To open an account at Alliant Credit Union, you must be a member. Membership is open to employees or former employees of partner businesses or organizations. Or you can join by making a $10 donation to the Foster Care to Success Foundation.

Best APY for a kid’s savings account: Spectrum Credit Union

Spectrum Credit Union currently offers the highest interest rate on the market for a kid’s savings account, but only on a relatively limited balance. Spectrum’s MySavings account earns 7.00% APY on account balances up to $1,000, making for a rate that’s higher than many CDs. Balances over $1,000 earn the regular savings rate, which is 0.50%. A high interest rate can help get kids excited about savings as their balance will grow quicker.

Spectrum Credit Union currently has branches in six states, but deposits can be made nationwide through the Credit Union CO-OP Shared Network. Membership is open to anyone by joining the Contra Costa County Historical Society ($15 membership fee) or the Navy League of the United States ($25 annual membership fee).

Best online tools for a kid’s savings account: Capital One

Kids are digital natives, and that makes a kid’s savings account’s online banking features extra important. In addition to being our pick for best overall savings account for kids, the Capital One Kids Savings Account offers a great selection of online saving and budgeting tools that will keep kids engaged and informed.

One of the best features is the ability to create additional savings accounts and set a target goal for each account. For example, you child may set a goal for holiday gifts, another goal for a new bike or car and another goal for vacation money. They can even give each account a nickname, such as “My Wheels Fund.”

Capital One has a full suite of online tools for your child to track their progress and success, helping to keep them focused on their goals. Capital One also offers standard features on its mobile banking app, some of which are available for kids, including the ability to check their balance or make a mobile deposit.

The average savings account balance by age

As your age increases, so should your bank balance (until a certain age). Let’s break down the findings by age group.

Average savings: Younger than 35

The average non-retirement savings for someone younger than 35 is $8,362, according to calculations by ValuePenguin, which, like MagnifyMoney, is owned by LendingTree.

While this number is low, money may be tight at this stage of life. People in this age group could be just over a decade into their careers, which can put them on the lower end of salary ranges.

The median earnings for Americans ages 25 to 34 are $837 a week, or $43,524 a year, according to the Bureau of Labor Statistics (BLS). Expenses such as housing, transportation and student loans can consume a good amount of income.

Keep in mind that the average age of a millennial homebuyer is 30.5, so mortgage down payments could be lowering the average savings.

Average savings: Ages 35-44

Between the ages of 35 and 44, the average non-retirement savings balance is $20,839.

During this decade, earnings grow. The median earnings are $1,022 a week, or $53,144 a year.

At this stage, more people are homeowners and parents of young children. The average cost of raising a child to the age of 18 is $233,610, or about $14,000 a year.

Average savings: Ages 45-54

Once you’re between the ages of 45 and 54, the average non-retirement balance is $30,441.

Retirement could be coming closer into view. And since more couples are delaying parenthood until their 30s, college tuition bills could be looming. Tuition and fees at a four-year public school average about $10,000 a year, but that doesn’t include room and board.

Fortunately, this decade is where Americans average the most earnings. The median earnings are $1,025 a week — or $53,300 per year — giving you a greater ability to save for emergencies, goals and retirement.

Average savings: Ages 55-64

Between the ages of 55 and 64, the average non-retirement savings account is $45,133. This could be a time when you start winding down your career and make your last push for retirement savings.

The median earnings in this age group fall slightly to $1,009 a week, or $52,468 a year. You should max out your retirement contributions and meet with a professional to see if you’re on track.

Of note, 47% of people opt to start taking Social Security benefits between the ages of 62 and 64. If you purchased a home at the average age of 30.5 on a 30-year mortgage, this is when you could pay off your mortgage if you didn’t refinance or sell the home. This helps to reduce your expenses and free up available funds for saving.

Average savings: Ages 65-74

Between the ages of 65 and 74, the average non-retirement savings balance is $54,089. More than 1 in 6 seniors work past age 65, according to ValuePenguin.

The median earnings for Americans older than 65 are $949 a week, or $49,348 a year. (Note that the BLS doesn’t track specific earning data between the ages of 65 and 74. Median earnings are estimated for those age 65 and older.)

Expenses should fall during this decade with child rearing most likely done.

Average savings: Age 75 and older

Once you reach age 75, the average non-retirement savings balance is $42,291.

The amount declines for the first time because you’re likely withdrawing some of your money for living expenses. And your ability to add to your savings also declines as many Americans have left the workforce by this age, even though the labor force participation rate for the 75-plus age group has nearly doubled in the past 20 years.

As we noted in the ages 65 to 74 section, the BLS doesn’t break down earnings’ estimates beyond 65 and older, so we’re looking at the same figures: $949 a week, or $49,348 a year.

How much you should have saved at each age

Your savings will likely have a purpose, such as emergencies, goals or retirement. To know if you are putting enough money away, it helps to follow these rules of thumb.

An emergency fund should contain three to six months’ worth of expenses, which will vary depending on your lifestyle and expenses.

Based on 2018 average annual expenditures from the BLS, we’ll provide emergency fund savings goals by age group. The low end includes three months’ worth of expenses, while the high end includes six months.

Let’s switch the focus to retirement savings. The average millennial has $24,570 in retirement savings, while the average baby boomer has $279,250.

Your target retirement balance can be calculated based on your income. By age 30, per Fidelity, you should have saved one times your income. By 50, that number grows to six times. And by 67, you should have saved 10 times your income.

According to the Census Bureau, the median household income in 2018 was $61,937. Based on these figures, here is a good general goal.

Tips for saving more money

While the average American household has a savings balance of $30,600, the median balance is $7,000. The average is the sum of all savings accounts divided by the number of account holders, while the median is the middle point in a number set.

The median amount offers a better representation of what most Americans have saved, since averages can be greatly impacted by outliers, such as high-income individuals with large deposit account balances.

If you are closer to the median than the average, It’s a good idea to address the gaps that exist by putting some savings strategies in place.

Follow the 50/30/20 budgeting rule

With the 50/30/20 rule, half of your income goes toward essential expenses (“needs”), such as housing, transportation, groceries and utilities. Thirty percent goes toward non-essential expenses (“wants”), such as dining out, clothes or cable TV. The remaining 20% of your income can go toward savings. Following this rule can help you avoid living paycheck to paycheck, as 78% of Americans do.

Pay down debt

One of the best ways to save money is to reduce expenses, such as high-interest credit card debt. The fewer bills you have, the more income you have available to sock away. You could use the debt snowball method, which pays off the lowest balance first to build motivation and momentum. Or consider the debt avalanche, which pays off the loans with the highest interest first. Whichever method you use, make it a priority to meet your savings goals. MagnifyMoney has a calculator than can help you decide between the two methods.

Save your tax refund

It can be tempting to spend a tax refund on something fun, such as a vacation, because it feels like a windfall. However, take advantage of the lump sum and put it toward your savings goals. The average tax refund for Americans in 2019 was $2,868, and saving it can put you well on your way to a higher bank balance.

Automate monthly savings

If you have to physically transfer money into savings, you’ll be less likely to do it. Instead, sign up for automatic savings deposits each pay period. You can divide it into non-retirement and retirement accounts. Chime Bank, for example, found that its members who signed up for automatic savings were able to put away more than three times as much money as members who didn’t.

Maximize interest rates

While it’s convenient to have your savings in the bank where you do your checking, the interest rates are often negligible, with the average savings account paying 0.09% APY, according to ValuePenguin. It’s possible to earn a much higher rate, so let your money work harder for you by choosing accounts that pay higher rates, such as high-interest savings accounts, certificates of deposit (CDs) or money market accounts.

Where you should keep your savings

The type of account you choose for your savings will depend on how you plan to use the money. Are you saving for a long-term or short-term goal? For some purposes, you’ll want an account that is more liquid than others.

For day-to-day expenses, you’ll want to use a checking account that allows you to make unlimited withdrawals each month. You can get an interest checking account, which pays an average of 0.06% APY.

For short-term goals, consider savings and money market accounts. Although, it’s important to know that most have restrictions on your number of withdrawals per month. The average savings account pays 0.09% APY, while the average money market account pays 0.16% APY.

You could place your emergency fund in a high-yield savings account, which keeps your money safe and pays a decent interest rate — often 2% or more.

If you don’t need your funds soon, you can choose an investment product such as a CD, which requires that you keep your money in place for a set period. Rates vary depending on the length of your CD term.

For retirement savings, you’ll need to put your money into an account designated for retirement savings, such as an individual retirement account (IRA), Roth IRA or a 401(k) plan offered by your employer.

To break it down, more than half of Americans have a savings account, 18% have money market deposit accounts, 7% have one or more CDs and 52% have at least one retirement account, according to MagnifyMoney research.

The bottom line

Many Americans aren’t saving enough for retirement or emergencies. In fact, only 48% of Americans have enough money to cover a $1,000 emergency, according to LendingTree.

By checking your milestones and comparing average savings by age group, you’ll have a better idea if you’re on track or if you’ve got some catching up to do.