Where can a minor get a decent interest rate on savings or money market account?

Question

PayPal pays a good rate but requires you to be 18. Local banks will open accounts for minors but won't pay more than 1% interest. Any suggestions would be appreciated.

Answer 1

I googled for "youth money market" and found a few banks that were willing to open accounts for teenagers. The rate isn't going to be as high as it will be for adults, but it'll be better than a standard checking or savings account.

The best I could find was 2%, though, which won't even keep up with inflation. If you're doing this as a means to teach economics to a youth, I'd pass -- it's pointless to teach them to lose money to inflation. If you're the youth and are trying to get a decent rate, I'd ask your parents for 5% and invest in the bank of Mom and Dad. Draw up a ledger and ask them to keep it for you, depositing money and collecting compound interest.

Good luck,

Doug

Answer 2

Open an on-line account with an internet bank like ING or Emigrant Direct. You'll get a 4.5%-5% return on a money market account with no minimum balance.

As a minor, vesting is your most important issue. Until you reach the age of majority, you'll have to have an adult or trust act on your behalf. For example, you can have your parents on the account jointly with you, or you can have the account titled in your parents name FBO (for the benefit of) your name (the money goes to you automatically if they die). But it doesn't have to specifically be a "minor's account". Alternately, if a trust is ever set up with you as the beneficiary, an adult trustee will be in charge of the account for you - a trust can be set up to have its holdings released to you once you turn 18. Generally, the laws simply will not let you enter into a contract on your own until you turn 18, including opening your own bank account.

Keep in mind that any adult can open an account jointly with you and act on your behalf - it doesn't have to be your parents. But I'd be very cautious to make sure it's somebody you can totally trust. Good luck, and congratulations on getting an early start.

Answer 3

Bankrate.com lists the best interest rates in the USA for FDIC accounts. The banks individually would have to tell you if your minority status is a problem to get an account. Sometimes a very small amount doesn't meet a minimum.

Answer 4

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Answer 5

Get your parents to open one for you. Get them to pay your pocket money straight in by direct debit whilst they are in there too ;-). There are so many high interest paying accounts for adults so if they get a min, drag them to the bank.

Answer 6

Get an adult to open a joint account with you but do not make them a signer..you can do that.

Answer 7

You will have to have your parents sign with you for the account.

Answer 8

Try ING, i dunno their age restrictions