For Parents

Financial Gifts for Kids

Get the best finance gift for the newborn, kid, or teen in your life!


Do you know what you don’t hear about? Kids and their ability to equally value all gifts. Give a kid an expensive or cheap toy, and in the end, they’ll probably treat both toys the same way. It is tricky to give them financial gifts as they might not understand the actual value of money just yet. Thankfully, there are a few ways you can gift your kid their own little version of financial freedom. We’ve rounded up everything you need to know about giving the perfect financial gift.

What is a Financial Gift?

A financial gift is a gift that provides a long-term form of savings to be accrued or invested throughout one’s childhood. Specifically, they often include forms of stocks, shares, bonds, and more that we’ll go over later. Cash doesn’t necessarily count as a financial gift unless one is urged to invest it. Not only do financial gifts offer your child the chance to explore finance safely, but it also gives you peace of mind that they’ll start on the right foot when they reach adulthood.


Here are the best financial gifts for newborns. 


Stock is potentially a life changer for your kiddo. The right pick or even anything remotely close to it can pay a good portion of their tuition. That said, stock isn’t a surefire way to make money, and in the hands of anyone that isn’t a professional trader and/or highly talented, it can amount to little more than gambling which is the last thing you want to do with a kid’s financial gift. So here are three tips to help you pick the right stock. 

1: Either do extensive research or speak to a financial advisor.

Trading isn’t always the most intuitive skill and, as such, requires a trained eye. If you have zero experience with trading and high finance, then consult a financial advisor. They’re available at your local credit union or bank. If you have a history of being good with trading, then just remember to do your due diligence. 

2: Look for long-term gain

Picking stock for a newborn means you can choose a stock that grows slowly but consistently. Imagine buying a chunk of shares that increases substantially yearly and how valuable that’d be to an account with 18 years to mature. 

3: Do your research again.

Seriously, there’s no way to guarantee stock, but you can better your odds by staying up to date on current trends in your investment. If need be, reinvest your stock in a different company.

Health Insurance

While health insurance doesn’t include the dividends that other financial gifts are known for, it does provide long-term peace of mind and ensure a certain level of medical care. Of course, this gift is best for kids that are uninsured for any given reason. Plus, giving a child the gift of health insurance means you can rest a little easier when they start playing sports, traveling, or in any emergency. 

Trust Fund

A trust fund is a great way to ensure your kid has access to money when they come of age. A trust fund is a separate entity with unique tax benefits and protections. Plus, trust accounts avoid probate court and can have specific stipulations before they can be accessed. If you worry you won’t be around when the child reaches adulthood, a trust account can offer peace of mind while ensuring the money is used the way you intended. However, that may be. 

Certificate of Deposit (AKA a CD)

A time deposit account, also known as a certificate of deposit or CD, uses the out of sight, out of mind philosophy. Typically, a CD has the highest interest yield compared to a traditional savings account. The drawback to CDs is that you can only withdraw during the grace period. Making a withdrawal outside the grace period comes with fees that often equal the interest you’ve earned. But, if the CD is a financial gift for a newborn, then you shouldn’t be withdrawing from it anytime soon. It’s a great way to make money work for you with little oversight. 

Savings Bonds

Savings bonds were once considered the ideal way to make long-term investments. These days, savings bonds are talked about more than they’re used. That’s because the treasury department has phased out traditional savings bonds. That said, you can still get a savings bond from any large financial institution. Unlike CDs, shares, etc., savings bonds have a fixed interest rate. And a series EE savings bond is expected to double in value over 20 years, which makes it an ideal financial gift for a newborn. It also lets you calculate the exact amount of money they’ll have at 18.


Believe it or not, your kid is ready for finance conversations once they reach elementary school. You can discuss the following financial gifts to get them excited about their future! Here are the best financial gifts for kids. 

529 Savings Plan 

A 529 savings plan is a state-sponsored account you can invest into and use to pay for any college expense. The catch is you can only use it for college and school-related costs. This means it offers protection against mismanaging funds. Plus, it’s tax-free, so you can maximize your investment. You’ll get updates about your 529 plan that you can share with your kid to keep them engaged and thriving!

Custodial Brokerage Account

Imagine a savings account where the money belongs solely to the child while earning a high-interest yield. If that sounds appealing, then check out a custodial brokerage account. Custodial accounts are also one of the most flexible account types, as the child can use the funds for anything once they reach 18 or 21, depending on state regulations. Also, any withdrawal must be used to benefit the child directly. 

Finance Books

Getting your kid interested in finance via books can be as beneficial as any of the accounts we’ve mentioned. Understanding money, investing, and the concept of buying power can be just as (if not more) powerful than having money. You can get your kid books that go over the basics of money management or research more complex books that discuss stocks, bonds, and more complex finance. Here’s our list of recommended books for small children. 

Youth Savings Account

A youth savings account can be opened for a minor at any time. But waiting until they reach a certain age is beneficial for a few reasons. For one, minor savings accounts don’t have yields as high as the other accounts we mentioned, so there’s little benefit to depositing a large amount of money into them. But getting a minor a savings account helps them get excited about savings.

Authorized User Status

Here’s a fact you won’t find on most other finance sites for parents and kids. Adding your child as an authorized user on your credit card builds their credit. You, potentially, can give them 18 years worth of good credit history. The catch is that you must keep your credit card account in good condition. Make your payments on time, keep the balance low, etc, as any mistake you make will report to their credit. Adding them as an authorized user can be as easy as calling your bank and giving them the child’s name and social security number. Authorized User Status is a bit of an advanced gift as it requires you to have and maintain good credit habits.


Sure, teenagers are probably the most challenging age group to get through to. But not impossible. The average teen wants more independence. Can you blame them? We’ve all felt like we were adults long before we were. So, when it comes to financial gifts for those rascals aged 13-19, focus more on giving them a little more say. Here are our best recommendations. 

Investing Account

An investing account is an account dedicated to buying and selling stock. You have a few options for this, you can open a custodial account with the broker, in which case the minor themselves are unable to trade actively, but they can work through you to try their hand at the market. 

Alternatively, more and more brokers offer investing accounts for teens that come with total autonomy. Fidelity, for example, offers investing accounts for ages 13-17. If neither is feasible, you can also open a regular bank account and treat it like an investment one. 

Once you have the account set up, work with your teen to find the right companies and learn the basics of investing.

Youth Checking

Youth checking is a great way to give a teen a little more breathing room. Most financial institutions offer these for ages 13-18, although they’ll need an adult as a co-signer. Youth checking accounts don’t have monthly service fees or minimums and most likely won’t have any opening deposit requirement. They’ll have a debit card to use as they wish, but you’ll have access to online banking and can monitor their spending. It’s a perfect finance gift for teens that travel a lot!

Small Business Registration

Legally and literally speaking, you can’t just give a teen a business. But, you can register the name and give them a position of power within the company. That means if a teen has an entrepreneurial spirit and is actively selling stuff on Etsy, Amazon, and other vendors, then registering a small business is the next logical step. Remember to check business laws in your state to make the most of your financial gift. 

Credit Card

If you added your child to a credit card account when they were a preteen, as recommended above, then it’s time to take the next step. Give them the credit card and explain how credit works in one sweet gift. A credit card elicits a different response than just opening a traditional account while also giving them the independence they seek. Just remember to monitor online banking.

Roth IRA

A Roth is a retirement account that offers a wide range of flexibility. It’s a bit of an all-in-one of a few other gifts in this article. With a Roth, a kid can invest, save for retirement, have emergency money, and establish a banking relationship all at once. You can set up a Roth with any credit union or bank. 

Which Gift is Right for Your Child?

Finding the right gift for your child will depend mainly on their personality. Are they more concerned with how they feel in the moment? Think about gifting them a debit card. That way, if they have any poor spending habits, you can nip them in the bud early. Are they more entrepreneurial? Gift them a small business registration or Roth to encourage them. In the end, choose the gift that you believe will have the most positive impact on their lives. 

Bottom Line

Any grandparent will tell you that kids grow up quickly. Giving them the right financial gift pays off in the long run, and it’ll give you a little peace of mind knowing they’re covered. At the end of the day, your job as a provider is to give them the life lessons and resources they’ll need to be successful. The right finance gift can do that and then some!

About the Author

Chadhurst Sharpe

Chadhurst Jainlett Sharpe spent over six years working as a personal finance banker. He's passionate about giving young minds the tools and resources they need to succeed with money.

Last updated on: August 29, 2022