Affinity Bank – 10% Interest For Kids
Affinity Bank is offering a bank account for kids that pays 10% interest. Their “Kids Only Savings Account” has a 10% APY interest rate on all balances up to and including $500. This rate is 250% better than even the highest savings accounts currently being offered by the online banks.
The minimum deposit on the account to begin the account is $1.00. Balances that exceed $500 will be paid the bank’s regular savings rates which is quite low (under 1%). Children that open an account also receive a free Piggy Bank so they can get even more savings.
The catch? Parents must have or open an account with Affinity Bank. Affinity does offer a free checking account with a minimum $100 balance required which pays no interest. While this isn’t good, the 10% for the kid’s account still makes this a better deal than you can get anywhere else. The Kids Only account is restricted to children under 16 years of age and certain other restrictions and transaction limits apply.
This can be a great deal for jump-starting a kid’s saving program. It’s also clear that this is a loss leader for Affinity, and that they’re trying to get more adults to open accounts there.
If the child is really young, you can open up the accounts you need to get the kid’s account, put $450 or so in the kid’s account, and skim off the earned interest into another account for the child as the balance approaches $500 so that you can keep accruing interest at 10%.
Until too many people do this, then they change the rules and it no longer is fun.