Saving for a baby’s future might seem like something to think about later, but the earlier you start, the better. A baby savings account can help you set aside money for your baby’s future needs—whether it’s for emergencies, education, or big milestones down the road. Here’s what you need to know about getting started.
Why Start a Baby Savings Account?
While a savings account alone won’t cover everything, it gives you a head start on financial security. And—whether you open a savings account on behalf of your child or open one to cover the cost of raising your baby—here are some key reasons to open one early:
1. To prepare for unexpected costs
Babies may be small, but boy howdy, are they are expensive! According to research by the U.S. Department of Agriculture and the latest Consumer Price Index Inflation calculator adjustment, a married, middle-income family could expect to pay about $29,959 to $33,813 on baby-related expenses in the first two years of their baby’s life. And as babies grow, medical expenses, childcare costs, and other surprises can pop up.
2. To build good habits
Starting early makes saving a routine part of life. As a parent, when you open an account for your baby, you establish the habit of setting aside money for future needs. Then, as your child grows, they can be involved in managing their own savings. This will help them develop financial responsibility from an early age.
3. Give family a way to contribute
Grandparents and other relatives often want to give meaningful gifts. So, a savings account provides an easy way for them to contribute to the child’s future. Instead of accumulating excess toys or clothes, family members can deposit money into the account. Then, those funds can support the child’s education, big milestones, or future financial security.
4. To Take advantage of time
Even small deposits add up over the years. Thanks to compound interest, an early start allows savings to grow more significantly over time. So, small contributions made now will be worth much more by the time the child is grown. The more the money grows, the more it can provide a head start for future financial goals.
Types of Savings Accounts for Babies
So, a savings account is a great idea, but which one do you choose? Well, there are different types of accounts to consider, each with its own benefits:
Basic Youth Savings Account
A Youth Savings Account is a simple, low-risk place to keep their money that earns interest over time. Plus, since the account bears their name, they’ll learn about money management in a truly hands-on way as they grow. They can even make deposits and earn prizes (like movie tickets, carousel rides, and gift certificates) for every $10 they add to their account.
First Step Certificate
A Certificate of Deposit (CD) is a deposit that you don’t touch for a specific period, called the term. With the Maps First Step Certificate, that term is 12 months. But what makes the First Step Certificate special is that, unlike a traditional CD, you can continue adding money to it throughout the term. This is the only certificate we offer that allows ongoing deposits, giving you a flexible way to grow your savings while still earning higher returns than a regular savings account. Just keep in mind that while you can add funds anytime, early withdrawals will result in a penalty.
Custodial account (UTMA/UGMA)
In Oregon, a custodial account—such as a UGMA (Uniform Gifts to Minors Act) or UTMA (Uniform Transfers to Minors Act) account—allows a parent or guardian to manage savings or investments for a child until they turn 21, or up to 25 years of age! The money legally belongs to the child and must be used for their benefit, whether for education, extracurricular activities, or future financial goals. These accounts can be opened at investment firms, banks, or credit unions (like Maps Credit Union). And, since Oregon follows UTMA guidelines, such accounts can hold a variety of assets, including cash, stocks, bonds, and real estate, giving families flexibility in saving for their child’s future.
529 College Savings Plan
A 529 College Savings Plan is a tax-advantaged savings plan designed to encourage saving for future education costs. In Oregon, families commonly use the Oregon College Savings Plan (which is available through the state’s OCSP website) or the MFS 529 Savings Plan (available through financial advisors). Contributions to a 529 plan grow tax-deferred, and withdrawals for qualified education expenses—such as tuition, fees, and certain room and board costs—are tax-free. Funds can be used at accredited institutions nationwide, including colleges, universities, and vocational schools.
The best savings option depends on your goals and your budget. But no matter what you choose, the best time to start saving for your baby is now. Whether you open a basic savings account or something more specialized, early savings lay the foundation for financial security. And remember, even small, consistent contributions can make a big impact over time. By starting now, you’re setting your child up for a brighter financial future.
FAQs About Savings Accounts for Babies
How much should I save for my baby?
There’s no set amount, but even small contributions add up. Start with what’s manageable—whether it’s $10 a month or a portion of gift money—and increase it over time.
Can my baby have a Maps account in their name?
Yes! Many banks and credit unions (including Maps) offer savings accounts for minors (aged birth to 17), though a parent or guardian is required to serve as a joint owner of the account for those 15 and younger.
Are there any age restrictions for opening a savings account for a baby?
Nope! If you’re opening a savings account to cover the cost of raising a child, you can do so at any time, even before the child is born. If you would like to open an account in your child’s name, you can do so as soon as your child (aged birth to 17) has been issued a social security number.
Are there any fees associated with a baby’s or child’s savings account?
There’s no initial membership fee to open a youth savings account. Also, our Youth Free Checking account has no monthly service fees and carries no minimum balance requirement.
Can I set up direct deposit or automatic transfers into my child’s savings account?
Absolutely! As a joint member of the account, you can set up direct deposit to your child’s account in our mobile app or fill out the Maps Direct Deposit Transfer Request Form and return it to your employer or the agency responsible for your payments. You can also schedule one-time and recurring transfers to your child’s account from your Maps accounts at your favorite branch or through online banking.
Is a youth savings account FDIC or NCUA insured?
Yes, at Maps, your child’s funds are federally insured by the NUCA’s Share Insurance Fund up to $250,000. Please refer to NCUA.gov for additional information on insurable limits.
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