{"id":14994,"date":"2025-11-21T01:07:00","date_gmt":"2025-11-21T07:07:00","guid":{"rendered":"https:\/\/www.discover.com\/online-banking\/banking-topics\/?p=14994"},"modified":"2026-02-02T12:59:59","modified_gmt":"2026-02-02T18:59:59","slug":"savings-accounts-for-grandchildren","status":"publish","type":"post","link":"https:\/\/www.discover.com\/online-banking\/banking-topics\/savings-accounts-for-grandchildren\/","title":{"rendered":"Your guide to savings accounts for grandchildren"},"content":{"rendered":"\n

Whether you\u2019re a brand-new grandparent or your grandkids are getting into their teenage years, opening a savings account for a grandchild is a practical (not to mention generous) way to help them get a head start on their financial journey. You may be wondering what the best way to save money for a grandchild is, so that you can give them a leg up on college tuition, a down payment on their first home, or contribute to other expenses in their future. Opening a savings account for your grandchild is a great place to start.<\/p>\n\n\n\n

So, what should you consider before opening a savings account for a grandchild? Here are the main things to keep in mind as you think about saving for your grandchild\u2019s future.<\/p>\n\n\n\n

Benefits of opening a savings account for grandchildren<\/h2>\n\n\n\n

Opening a savings account<\/a> for a grandchild can have many advantages, says Chanelle Bessette, a personal finance writer. \u201cThe savings you gift them can go toward college, wedding expenses, starting a business, or another major purchase,\u201d she says. \u201cIt can also help them avoid taking on debt that would otherwise hold them back as they move through life.\u201d<\/p>\n\n\n\n

Bessette breaks down the three benefits of opening a savings account for a grandchild:<\/p>\n\n\n\n

1. Your grandchild can learn about managing their money<\/h3>\n\n\n\n

Even if the money isn\u2019t used for a big life event, one major benefit of a savings account for a grandchild is that it can teach them financial responsibility<\/a>, Bessette says. As the grandchild gets older, you or their parents can use the savings account as a tool to help them learn how to make smart financial decisions.<\/p>\n\n\n\n

For example, Bessette gives the example that your grandchild might want to attend both swim camp and cheerleading camp. Rather than simply footing the bill without question, you could encourage them to research the cost of summer camps<\/a> in the area, investigate scholarship opportunities, and even get a summer job to cover a certain amount of the cost if needed. Having access to some money of their own can help young people learn a variety of important lessons about money, while benefiting from the guidance of an adult, Bessette adds. <\/p>\n\n\n\n

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2. Savings accounts for grandchildren offer flexibility<\/h3>\n\n\n\n

Another benefit of opening a savings account for a grandchild is the flexibility a savings account affords. You have the freedom to choose how much and when to contribute to the account. While Bessette recommends having a deposit schedule in mind and communicating it to your grandchild\u2019s parents (more on that below), you are free to adjust your plan as things change. \u201cMaybe you want to add more, or maybe you need to pull back\u2014savings accounts for grandchildren allow you that flexibility,\u201d Bessette says.  <\/p>\n\n\n\n

3. With a savings account, your grandchild\u2019s savings can grow, thanks to compound interest<\/h3>\n\n\n\n

Savings accounts for grandchildren can grow over time thanks to compound interest. Especially if you\u2019re saving over a long period\u2014for example, from a child\u2019s first birthday to their 18th\u2014the money has a good chance to grow. With compound interest, you earn interest on both your principal\u2014in other words, your bank balance\u2014and any interest you receive. As a result, your savings can really add up, especially if you have a significant amount of money in the account.<\/p>\n\n\n\n

360 Performance Savings<\/a>\u00a0 offers a high rate to help your balance grow.1<\/sup><\/p>\n\n\n\n

Now that you have a grasp of the benefits of savings accounts for grandchildren, it\u2019s time to ask yourself a few questions before opening one.<\/p>\n\n\n\n

Questions to ask before opening a savings account for a grandchild<\/h2>\n\n\n\n

As you determine the best way to save money for a grandchild, Bessette says there are some key questions to consider:<\/p>\n\n\n\n

1. Who will be the account custodian?<\/h3>\n\n\n\n

Before you open a savings account for your grandchild, you\u2019ll need to determine who the custodian will be. Specific rules can vary depending on the bank. <\/p>\n\n\n\n

Custodians typically have the authority to:<\/p>\n\n\n\n