Is a piggy bank or savings account better for your kids?
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Whether you're teaching your child to save for the first time or looking to build stronger money habits as a family, choosing between a piggy bank and a savings account can feel surprisingly complex. Both have their benefits, but they serve different purposes. Let's break down how each works, when to use them, and how to transition from one to the other as your child grows.
Piggy bank: A great start for younger kids
Piggy banks are a great way to introduce the concept of saving for little ones. They get hands-on savings experience by physically adding coins or bills to their piggy bank, which can help them visualize money and understand its value. There are a few things to consider when using a piggy bank:
Instant access: Kids can open it up and count their cash anytime, making it a good fit for short-term goals.
Math made fun: Sorting and counting coins builds basic skills.
No growth: Money in a piggy bank doesn’t earn interest and could lose value over time.
Easily lost: Unlike a bank account, piggy banks offer no protection from loss or theft.
Savings account: A secure way to grow their money
Be a financially smart family!
For older kids, opening a savings account might make more sense. Older kids and teens can earn interest on money when they deposit it into a traditional savings account and they’ll be able to start learning how to manage their money digitally in most cases. Here are some other things to think about when opening a savings account for your child.
Interest builds savings: With compound interest, money grows over time and even small amounts can add up.
Safe and protected: In the U.S., savings accounts are typically FDIC- or NCUA-insured up to $250,000.
Helps teach long-term planning: Unlike the quick access of a piggy bank, savings accounts promote patience and goal-setting.
Trackable and educational: Online dashboards and mobile apps help families track balances and savings progress together.
💸 With Greenlight, kids and teens can deposit money into savings, set up dedicated savings goals, and even earn up to 6%* on their savings.
Piggy bank vs savings account: Key differences
Feature | Piggy bank | Savings account |
Physical interaction | ✅ Tangible, kid-friendly | ❌ Mostly digital |
Interest earned | ❌ None | ✅ Yes, varies by account |
Safety | ❌ Not secure | ✅ FDIC/NCUA-insured |
Learning opportunity | ✅ Great for basics | ✅ Great for budgeting and planning |
Withdrawal flexibility | ✅ Anytime | ✅ With planning |
When to use each and how to transition
If you’re trying to decide whether using a piggy bank or savings account makes sense for your child, you can use their age to help determine which is better.
For ages 3 to 6: A piggy bank makes saving fun and visual. Kids see their money grow with each deposit.
For ages 7 to 12: Introduce a savings account. Talk about setting goals and earning interest, and then move some funds from the piggy bank to their new account.
For teens: A savings account becomes more essential. They may be saving for a phone, a trip, or even college. Having a digital account helps them track progress and stay focused.
Tips to teach smarter saving habits
It’s never too early to start saving wisely. Here are some tips to teaching your kids the power of saving.
Match their savings: Offer a small contribution for every dollar they save to encourage consistency.
Set visible goals: Use charts, jars, or Greenlight's savings goals tracker.
Celebrate milestones: Acknowledge when they hit $10, $50, or reach a goal.
Talk about money openly: Regular conversations help normalize budgeting, saving, and even investing.
Make saving easier with Greenlight
Greenlight helps bridge the gap between old-school piggy banks and modern savings accounts. Here’s what families can expect when they sign up for a Greenlight account:
Set up savings goals with custom names and target amounts.
Transfer allowance automatically based on chores completed.
Track interest earned, deposits made, and goal progress in real time.
Encourage long-term habits with features like Parent-Paid Interest and Round Ups.
With Greenlight, kids learn how money works, and parents stay in the loop.
So, which is better?
Piggy banks are a great first step, but savings accounts offer long-term value. Each tool serves a purpose, and combining both helps children learn the value of money, patience, and planning. Greenlight brings it all together with tools for families to support smarter saving, every step of the way.
Make saving fun for kids. Customize allowances, set savings goals, and learn to invest with Greenlight’s award-winning app. Try Greenlight, one month, risk-free.†
This blog post is provided "as is" and should not be relied upon as a substitute for professional advice. Some content in this post may have been created using artificial intelligence; however, every blog post is reviewed by at least two human editors.
*Greenlight Core families can earn 2% per annum, Greenlight Max families can earn 3% per annum, Greenlight Infinity families can earn 5% per annum, and Greenlight Family Shield families can earn 6% per annum on an average daily savings balance of up to $5,000 per family. To qualify, the Primary Account must be in Good Standing and have a verified ACH funding account. See Greenlight Terms of Service for details. Subject to change at any time.
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