We first opened an account at ING Direct back in 2001, not long after it opened for business in the United States. Almost since the beginning, my wife and I used it to store money and handle allowance bookkeeping for our kids. To keep things simple, we  created sub-accounts from our main savings account.

That made for a super-easy setup since it takes about 20 seconds (I’ve timed it) at ING Direct to create a new sub-account. The sub-accounts are nicknamed for each child and automatic transfers drop their allowance in so we no longer had to remember that every week. It’s a great system. 

However, the above approach doesn’t officially put the money into the child’s name, which could have tax and other advantages. And if you want to provide your kids with online account access, you have to turn over your own username/password. And if you do that, there’s nothing to keep enterprising youngsters from making an extra transfer or two into their own accounts. While I’m sure that wouldn’t happen in our house (right, boys?), it’s not an ideal setup.

ING Direct solved those limitations in October when it launched special kids savings accounts, which are joint accounts with an adult. But the child gets his own login-info separate from the adult. Kids can log in to check their balance, but only the adult can make transfers.

The ING Direct kids account pays the same rate as the adult version, currently 1.1%. And there are no fees, an ING Direct custom. The only downside, you have to complete a small application process, which took 3.5 minutes, not much, but still a bit of a chore compared to the 15-second, sub-account set-up process.

Once established, the new savings account shows up on the adult’s main account menu like any other account.

Bottom line: It’s a nice addition to the ING Direct lineup. While relatively bare bones in terms of features and functions, it will be interesting to see what the bank does with it over time such as integrating with Planet Orange, the bank’s financial education effort (see screenshot below).

Landing page for more info on Kids Savings Accounts ( link, 23 Nov. 2010)

Kids account application, for adding to an existing adult account
Note (not shown): On the second step, you choose a 6-10 digit unique PIN for the child and on the third step, you fund the account with a minimum opening deposit of $1.

Planet Orange is the bank’s financial education resource <orangekids.com> Note: So far, no integration with Kids Savings

Hat tip: DepositAccounts.com