Methodology: Kids’ checking accounts and prepaid debit cards

Parents have plenty of options when it comes to helping their kids learn to spend money responsibly. And while kids’ checking accounts and kids’ prepaid debit cards are often discussed in the same conversation, these two options are drastically different. That’s why we rate these products using different criteria.

Differences between kids’ checking accounts and prepaid debit cards

Checking accounts for kids are largely similar to checking accounts for adults, except they usually have reduced fees and age restrictions. Some checking accounts for kids also include parental controls and financial literacy features, but this isn’t always the case.

On the other hand, kids’ prepaid debit cards are much different than standard prepaid debit cards. For starters, many of today’s best debit cards for kids include interactive financial literacy features and the ability to categorize funds for different purposes. Plus, these cards commonly give parents the ability to assign chores and automate allowance payments. Some providers also let parents restrict when and where their kids can use the cards.

Our ratings

We rate kids’ checking accounts and kids’ prepaid debit cards using a system of one to five stars that represent levels of quality:

★★★★★ — Excellent

★★★★☆ — Good

★★★☆☆ — Average

★★☆☆☆ — Subpar

★☆☆☆☆ — Poor

How we rate checking accounts for kids

We analyze and weigh the following factors equally when rating checking accounts for kids: monthly fee, features, ATM access, customer support options, and availability. We rate APY and requirements to earn APY separately as interest isn’t a common feature for checking accounts. Although we consider this factor when rating interest-bearing checking accounts, we don’t issue a rating for those accounts that don’t offer it.

Monthly fee

Most of the kids’ checking accounts we review don’t require a monthly fee and earn a top rating in this category. For those that do charge a monthly fee, you can often avoid it by opting for electronic statements rather than paper.

Here’s how we assign star ratings for monthly fees:

★★★★★ — No monthly fee

★★★★☆ — $1 to $3.99 monthly fee

★★★☆☆ — $4 to $5.99 monthly fee

★★☆☆☆ — $6 to $7 monthly fee

★☆☆☆☆ — $8 or more

Minimum opening deposits

Some banks don’t require an initial deposit to open a kids’ checking account, while others ask for $5, $10, $25 or more.

We rate banks and credit unions against a scale of the lowest to highest minimum deposits on the market:

★★★★★ — No minimum deposit

★★★★☆ — $1 to $4

★★★☆☆ — $5

★★☆☆☆ — $10 to $25

★☆☆☆☆ — $26 or more

Features

Checking accounts for kids vary greatly in terms of their features. Some accounts don’t offer any bells and whistles, while others come with a wealth of features like ATM reimbursements, financial quizzes, chores and allowances, virtual cards, access to in-app stores or charities.

We rate the accounts we review by the variety of features available:

★★★★★ — 5 or more features

★★★★☆ — 3 to 4 features

★★★☆☆ — 2 features

★★☆☆☆ — 1 feature

★☆☆☆☆ — No features

ATM access

The majority of checking accounts for kids come with debit cards your child can use to withdraw funds from ATMs. But not all banks offer free access to the same number of ATMs.

We assign star ratings based on the number of free ATMs your kid can use:

★★★★★ — 50,000 or more ATMs

★★★★☆ — 35,000 to 49,999 ATMs

★★★☆☆ — 15,000 to 34,999 ATMs

★★☆☆☆ — 5,000 to 14,999 ATMs

★☆☆☆☆ — Fewer than 5,000 ATMs

Customer support options

Another factor that varies significantly from one bank to the next is the number of ways you can reach customer service. Some institutions offer support by email only, while others provide live chat and a 24/7 hotline.

We break down our ratings by number of support options available — and the quality of support according to online customer reviews:

★★★★★ — 5 or more options

★★★★☆ — 4 options

★★★☆☆ — 3 options

★★☆☆☆ — 2 options

★☆☆☆☆ — 1 option

Availability

Some checking accounts for kids are available to children within a specified age range, while others don’t limit availability by minimum or maximum ages. And although credit unions commonly offer kids’ checking accounts, have strict membership requirements that depend on your profession or where you live. Then there are student checking accounts, which are available to kids who can present an ID card from their school. We give a lower rating for those accounts that have a tight age group or strict membership requirement.

We assign star ratings based on the requirements of the accounts we review:

★★★★★ — No membership requirement

★★★★☆ — Easy to join membership (e.g, credit union pays for your one-time membership fee)

★★★☆☆ — Account available regionally (e.g. East Coast)

★★☆☆☆ — Available only to one or two age groups

★☆☆☆☆ — Strict membership requirement due to profession or a specific state, city or county

APYs

Most checking accounts for kids don’t earn interest, but a few do. Because this feature is not common to all kids’ accounts, we don’t factor APY into the ratings for accounts that don’t offer interest. However, we do weigh it for those that do.

For accounts that offer interest, we rate them based on the following annual percentage yields (APYs).

★★★★★ — 1% APY or higher

★★★★☆ — 0.11% APY to 0.99% APY

★★★☆☆ — 0.04% APY to 0.10% APY

★★☆☆☆ — 0.01% APY to 0.03% APY

★☆☆☆☆ — We don’t consider this as part of our rating scale

Requirements to earn interest

Among the kids’ checking accounts that offer interest, maximum APYs might depend on whether you’re able to meet specific balance, deposit or withdrawal requirements. Some accounts require a minimum balance to earn interest, while others only offer APYs if your kid receives direct deposits or spends a certain amount of money each month.

We assign interest requirement ratings based on the account restrictions to earn APY:

★★★★★ — No requirements

★★★★☆ — Requires you to maintain a minimum balance

★★★☆☆ — Requires payments by direct deposit

★★☆☆☆ — Requires spending a defined amount or conducting a specific number of transactions

★☆☆☆☆ — Requires you to meet 2 or more balance, deposit or withdrawal requirements

How we rate prepaid debit cards for kids

We rate prepaid debit cards for kids based on their fees, features, customer support options and account availability.

We exclude two factors when rating these accounts.

• Maximum balance. Most kids’ prepaid cards limit how much money your child can store on their card. We don’t weight this factor because we believe most parents sign up for these products so their children can learn how to manage relatively small amounts of money. If your kid requires more money than the maximum allowable balance for their card, we recommend transferring funds to a kids’ savings account that accrues interest.
• Interest. None of the kids’ prepaid cards we’ve come across earn interest, so we don’t consider APY a factor in our rating. Some cards offer parent-paid interest, but that’s not the same as earning an APY from a bank.

We rate prepaid debit cards for kids based on four factors. We weight all factors equally except for features, as we believe that the purpose of these prepaid debit cards is to provide kids with a platform to develop healthy money habits.

Fees

Many debit cards for kids require monthly fees. To determine a rating scale for this category, we calculated the average monthly fee across all prepaid cards we compare. And we assigned the average monthly fee a rating of 3 out of 5.

We rate kids’ debit card fees based on whether a particular card’s fee is higher or lower than the average of $4 to $5 monthly:

★★★★★ — No monthly fee

★★★★☆ — $1 to $3 monthly fee

★★★☆☆ — $4 to $5 monthly fee

★★☆☆☆ — $6 to $8 monthly fee

★☆☆☆☆ — Monthly fee of $9 or more

Features

Some prepaid debit cards don’t come with any features, while others offer numerous perks and special abilities like chore assignments, automated allowance payment, the ability to restrict purchases, investing options and purchase protection. We believe that parents who are after these types of cards want to give their kids a more hands-on financial experience to learn healthy money habits, such as moving their money between accounts to saving or investing money on a weekly or monthly basis.

Because of this it’s given a weight twice that of other factors — meaning this factor has twice the influence on the rating than others in this category.

Depending on the variety of features available, here’s how we rate the accounts we review.

★★★★★ — 5 or more features

★★★★☆ — 3 to 4 features

★★★☆☆ — 2 features

★★☆☆☆ — 1 feature

★☆☆☆☆ — No features

Customer support options

The number of ways available for you to contact customer service varies by provider. Some companies offer support by email only, while others provide live chat and 24/7 phone support.

We break down our ratings by number of support options available — and the quality of support according to online customer reviews:

★★★★★ — 5 or more options

★★★★☆ — 4 options

★★★☆☆ — 3 options

★★☆☆☆ — 2 options

★☆☆☆☆ — 1 option

Availability

Some debit accounts for kids are available to children within a specified age range, while others don’t limit availability by minimum or maximum ages.

We assign star ratings based on the requirements of the accounts we review:

★★★★★ — No membership requirement

★★★★☆ — Easy to join membership (e.g, credit union pays for your one-time membership fee)

★★★☆☆ — Account available regionally (e.g. East Coast)

★★☆☆☆ — Available only to one or two age groups

★☆☆☆☆ — Strict membership requirement due to profession or a specific state, city or county