Looking to teach your teenager the power of compound interest without getting crushed by fees? Trust me, I get it. You want an account that actually grows their money while they learn the fundamentals of saving.
But here’s what most parents get wrong about teen savings accounts: they settle for accounts that pay practically nothing in interest. Why teach your kid to save if their money isn’t actually growing?
I’ve been analyzing teen savings options, and Axos Bank’s First Savings keeps standing out from the crowd. Let me show you exactly why this account might be the smartest financial move you make for your teenager.
>> LEARN MORE ABOUT FIRST SAVINGS HERE
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What Makes Axos First Savings Actually Worth It?
Here’s what caught my attention immediately: 0.25% APY with zero monthly fees. That might not sound like much, but let me put it in perspective.
Most major banks pay 0.01% on savings accounts. That means on a $1,000 balance, your teen would earn about 10 cents per year at a traditional bank. With Axos First Savings? They’d earn $2.50 annually.
But the real power comes from the fee structure:
- No monthly maintenance fees
- No minimum balance requirements
- No overdraft fees (because it’s a savings account)
- Free mobile app with goal-setting tools
Remember: when you’re teaching a teenager about saving, every fee sends the wrong message. Why should they get penalized for building good financial habits?
The Features That Actually Build Wealth
Let me break down what makes this account work for long-term growth:
Compound Interest That Compounds Daily
Your teen’s money earns interest every single day, and that interest earns interest. It’s not just 0.25% once per year—it’s daily compounding that adds up faster than you’d expect.
Goal-Setting Through the Mobile App
The Axos app lets teens set specific savings goals and track progress visually. Want to save $500 for a car? The app shows exactly how much they need to save weekly to hit that target.
Easy Funding Options
- Link external checking accounts for transfers
- Set up direct deposit from part-time jobs
- Mobile check deposits for birthday money and odd jobs
- Transfer from parents’ Axos accounts instantly
The Real Numbers: How Much Can Your Teen Actually Earn?
Let me show you some realistic scenarios based on typical teen saving patterns:
Scenario 1: The Part-Time Worker
- Saves $100/month from part-time job
- After 2 years: $2,406 (vs. $2,400 with no interest)
- Extra earnings: $6 from compound interest
Scenario 2: The Goal-Oriented Saver
- Starts with $500, adds $50/month
- After 3 years: $2,319 (vs. $2,300 with no interest)
- Extra earnings: $19 from compound interest
Scenario 3: The Big Saver
- Starts with $1,000, adds $200/month
- After 4 years: $10,680 (vs. $10,600 with no interest)
- Extra earnings: $80 from compound interest
The best part? These numbers assume the interest rate stays at 0.25%. If rates rise, your teen’s earnings grow even faster.
How It Stacks Up Against Other Teen Savings Options
I compared Axos First Savings to the competition, and here’s what I found:
vs. Capital One Kids Savings:
- Capital One: 0.30% APY (slightly higher)
- Axos: Better mobile app with goal-setting features
- Both have zero fees and no minimums
vs. Chase First Banking Savings:
- Chase: 0.01% APY (practically nothing)
- Axos: 25x higher interest rate
- Chase has physical branches; Axos is online-only
vs. Alliant Credit Union Teen Savings:
- Alliant: 0.25% APY (same as Axos)
- Alliant requires credit union membership
- Axos is available to anyone in all 50 states
The Parental Control Features That Actually Matter
Here’s where Axos First Savings really shines for parents:
Complete Visibility
- View all transactions from your own Axos dashboard
- Set up account alerts for deposits and withdrawals
- Monitor progress toward savings goals
- Sync with other family accounts
Smart Spending Limits
- Parents can set withdrawal limits
- Require approval for large withdrawals
- Lock/unlock account access if needed
- Full transaction history always available
Educational Tools Built In
The app doesn’t just store money—it teaches financial literacy through goal tracking, spending categorization, and progress visualization.
Who This Account Is Really For
Axos First Savings works best for teens who:
- Have regular income from jobs or allowances
- Are motivated by seeing their money grow over time
- Prefer digital banking over visiting physical branches
- Have specific savings goals (car, college, etc.)
- Want to learn about compound interest firsthand
As financial experts consistently point out: “Starting early means they have money-management skills and an established banking relationship when they enter adulthood.”
Trending Savings Account Deal:
The Hidden Benefits Most Parents Miss
No Age Restrictions on Learning
While the account is designed for ages 13-17, the financial lessons learned here apply for life. Your teen is literally practicing the same strategies wealthy adults use.
Seamless Transition to Adult Banking
Axos offers high-yield savings accounts for adults. When your teen turns 18, they can easily transition while maintaining their banking relationship and habits.
Protection from Inflation
While 0.25% won’t beat inflation, it’s better than letting money sit in a checking account earning nothing. Your teen’s purchasing power erodes more slowly.
The Potential Downsides to Consider
Let me be honest about where this account falls short:
Interest Rate Isn’t Competitive with High-Yield Options
Online banks like Marcus or Ally offer 4%+ APY, but they’re not designed for teens and lack parental controls.
No Physical Branches
If your teen prefers face-to-face banking or needs to deposit cash regularly, the online-only model might be limiting.
Limited to Teen Years
Once they turn 18, they’ll need to transition to a different account type (though Axos makes this easy).
Click here to discover more ways to automate your savings and achieve your financial goals.
Setting Up Your Teen for Long-Term Success
Here’s what I recommend once the account is open:
Start with Clear Goals
Help your teen identify what they’re saving for. Specific goals create motivation that vague “save money” advice never will.
Automate Everything Possible
Set up automatic transfers from checking to savings. Pay yourself first isn’t just adult advice—it works for teenagers too.
Review Progress Monthly
Make it a family tradition to check savings progress together. Celebrate milestones and adjust goals as needed.
Teach the Power of Time
Show your teen how starting to save at 16 versus 26 creates dramatically different outcomes by retirement age.
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The Bottom Line
Axos First Savings isn’t going to make your teenager rich overnight. But it will teach them something more valuable: that money can work for them instead of against them.
The 0.25% APY beats 99% of traditional banks. The zero-fee structure means every dollar saved actually stays saved. And the goal-setting tools turn abstract financial concepts into concrete, achievable targets.
Most importantly, it introduces the concept of compound interest during the years when time is your teen’s greatest asset. A 16-year-old who understands compound interest has a massive advantage over peers who don’t start saving until their twenties.
Remember: the goal isn’t to find the highest interest rate available. It’s to find an account that builds good financial habits while actually growing your teen’s money. Axos First Savings delivers on both fronts.
Want to give your teenager a real head start on building wealth? This account makes it easy to turn saving from a chore into a habit that will serve them for life.
The best part? When they see their first interest payment hit the account, they’ll understand why you insisted on teaching them about money. That moment of realization is worth more than any lecture about financial responsibility.
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