Sarah Sharkey | Bankrate.com (TNS)

A savings account is a useful tool for teaching children the value of money and managing finances. But before opening a savings account for your child, it pays to look for some key features.

Here are some of the best savings accounts for kids, including those that require no minimum balances, charge no fees or provide ways to eliminate them and offer competitive APYs.

Best savings accounts for kids

Each of these savings accounts offers a worthwhile place to start a child’s banking journey. Check for account opening age restrictions, whether there are fees and what happens when the child reaches a certain age before opening a savings account for your child.

Alliant Kids Savings Account

The Alliant Kids Savings Account requires an initial deposit of $5, which the credit union will cover for you. The account pays 3.1% annual yield, but it earns no interest if the daily balance falls below $100. No monthly fee is charged as long as you receive e-statements instead of paper statements.

The account offers a mobile banking app that will allow you and your child to digitally monitor the account’s funds, as well as make deposits and review how much interest has been earned. Children 13 and older can apply for a Teen Checking Account with Alliant to continue their financial journey.

Alliant Credit Union is rated Bankrate’s best credit union, so it’s no surprise that this savings account offers practical features that will help children learn more about money.

Why we chose it: The Alliant Kids Savings Account earns a competitive yield for a children’s savings account.

Capital One Kids Savings Account

The Capital One Kids Savings Account charges no fee, has no account minimum and pays 0.3% APY on any balance.

In addition to earning some interest, the account offers a mobile app that allows children to check account balances, but the dual-access account requires adult supervision to transfer funds out of the account. Capital One was rated Bankrate’s best big bank.

Why we chose it: You don’t have to wait until your child is a certain age to open this account. A parent or a legal guardian can open this account with a baby. And grandparents can open one of these accounts when the child turns 12.

PNC’s ‘S’ is for Savings

The ‘S’ is for Savings account offered by PNC Bank is designed to help younger children learn about money and banking. The account’s online financial education tools are robust and feature your child’s favorite Sesame Street characters.

Children can access the account through the PNC Mobile Banking app. The goal of the app is to provide an interactive banking experience that teaches your child more about “saving, sharing, and spending.”

The account requires no minimum deposit to open and charges a $5 monthly fee that can be waived if:

—The account holder is under age 18.

—An average monthly balance of at least $300 is maintained.

—There’s at least one automated transfer of $25 or more each statement period from a PNC checking account.

A downside: The APY offered is very low, at only 0.01% APY. With that in mind, the account is likely best for younger children who have a lot to learn about the basics of money. With the help of fun characters, they’ll be more likely to engage in concepts, such as what interest is, even if they’re not earning much of it.

Why we chose it: The bank has a learning center where kids can learn from Sesame Street characters.

Boeing Employees Credit Union Early Saver Account

Boeing Employees Credit Union offers an BECU Early Saver Account that has no monthly fees and no minimum opening balance. As children save, they earn an extremely competitive 6.17% APY on the first $500, while amounts above that earn just 0.5% APY, comparable to rates offered by traditional bank savings accounts.

Though the credit union was founded for Boeing employees, BECU has since expanded to offer membership to anyone that lives or owns a business in Washington state plus select counties in surrounding states or is affiliated with certain organizations. The geographic limitation means the account isn’t available everywhere and may not be a viable option for those who live outside its service area and have no connection to Boeing.

Why we chose it: The yield on the balance for $500 and under is very competitive.

Pen Air Federal Credit Union Level Up Youth Account

Pen Air Federal Credit Union offers the Level UP Youth Savings Account that pays 0.3% APY on all savings balances. Accounts can be opened at a Pen Air branch in northwest Florida or southern Alabama, but can also be opened online, provided one of these membership criteria are met:

—Active duty or retired military.

—Civil service employee.

—Working for a partnering employer group.

—Immediate family members of those qualified for membership.

Why we chose it: The Pen Air Federal Credit Union Level Up Youth Account has a debit card for children aged 8-18.

FAQ

—Why should my kid have a savings account?

A savings account is a useful tool to help children build financial knowledge. By slowly building savings through childhood, kids can build the right money habits, learn about the importance of saving and understand the value of money.

—How do you open a kids savings account?

In most cases, you can apply for a kids savings account online. You’ll just need to provide some basic information about yourself and your child. If you’re approved, you can make your first deposit and start using your account.

—Do you have to pay taxes on kids’ savings accounts?

If your child’s unearned income (including investments and interest) is $1,250 or less for the year, you don’t need to pay taxes. If it’s $1,250 to $2,500, the income is taxed at your child’s tax rate. Anything above $2,500 is taxed at the parents’ tax rate — unless the child’s tax rate is higher.

(Bankrate’s Matthew Goldberg contributed to an update of this story.)

©2023 Bankrate.com. Distributed by Tribune Content Agency, LLC.

Andrew Dehan | Bankrate.com (TNS)

The average 30-year fixed mortgage rate touched 8% on Thursday, according to Bankrate data, a level not seen since the year 2000.

Over the past several weeks, the 30-year rate has been on the cusp of 8%, backed off, then picked up steam again — a confounding pattern somewhat atypical of this time of year, when home sales and mortgage activity begin to slow.

Why mortgage rates are so high

There are several variables that have prompted the 30-year rate’s march toward 8%:

—The 10-year Treasury yield: The rates on fixed-rate mortgages are tied to the yield on 10-year Treasury notes. When this bond yield goes up, so do mortgage rates, with a margin. In general, higher yields signal confidence in the economy. If investors foresee trouble, they’ll buy lower-risk Treasurys, which drives down yields and, in turn, fixed mortgage rates. Against that grain, the yield has risen rapidly as of late, inching toward 5% as of Oct. 19, due partly to economic uncertainty and the Israel-Hamas war.

—The Federal Reserve: The Federal Reserve sets the federal funds rate, the rate at which banks loan to each other overnight to maintain Fed reserve requirements. While this rate isn’t directly linked to the 30-year mortgage, when the Fed raises it, borrowing costs across the board rise. The central bank has been increasing this rate for some time to control inflation.

—Inflation: Inflation can buffet mortgage rates up or down, and lately it’s the latter. When inflation is too high, investors demand higher bond yields, which pressures mortgage pricing overall. (Your lender, on the other hand, might price loans lower to attract borrowers coping with elevated expenses.) The September Consumer Price Index came in at 3.7%, above the Federal Reserve’s target of 2%.

The interplay between these factors has brought on a surge in the 10-year Treasury, along with mortgage rates at 23-year highs.

“Typically when global events are uncertain and tumultuous, as what’s taking place in the Middle East, money flows into bonds and rates are a beneficiary,” says James Sahnger of Jupiter, Florida-based C2 Financial Corporation. “Today though, inflation has not shown signs of pulling back and continued excess spending in Washington is not helping. For rates to start showing some relief, we will have to see sustainable declines in economic data.”

Of course, some borrowers were already receiving rates above 8%, depending on factors like their credit score and finances, location and loan type. As of Thursday morning, Bank of America, Pennymac, Rocket Mortgage and others were advertising APRs higher than 8%, some even over 8.5%.

Americans recently cited high mortgage rates, rather than high home prices, as the No. 1 reason to hold off on buying a home, according to Fannie Mae’s Home Purchase Sentiment Index.

Indeed, many homeowners aren’t selling because they’re locked in at lower rates, and many buyers aren’t purchasing because of higher rates and prices, compounded by limited choices on the market.

Home sales were down by 2% year-over-year in September, according to the National Association of Realtors (NAR).

“As has been the case throughout this year, limited inventory and low housing affordability continue to hamper home sales,” says Lawrence Yun, NAR chief economist. “The Federal Reserve simply cannot keep raising interest rates in light of softening inflation and weakening job gains.”

Have mortgage rates hit their peak?

The average monthly payment on a 30-year mortgage has increased substantially in the last two years. While home prices have been out of reach for many for some time, mortgage rates only began rising in 2022, following a period of rock-bottom rates during the pandemic.

Now at 8%, the average monthly payment has increased to $2,806 based on the latest reported median home price — a 91% increase over 2021.

Is 8% the ceiling, though? Some forecasters are calling for rates to decrease by year-end. The Mortgage Bankers Association currently expects the 30-year rate to land at 7.2%, up from an estimate of 6.6% a month ago. Fannie Mae researchers predict 7.3%.

“I never call tops or bottoms except to say that if we haven’t seen the top, we are very close to it,” says Joel Naroff, president of New Jersey-based Naroff Economics.

“Rates will eventually come down, but I don’t see it happening without some serious Fed intervention,” says Sean Salter, associate professor of Finance at Middle Tennessee State University. “Rates will continue to rise until there’s a significant reason to change the market’s mind.”

©2023 Bankrate.com. Distributed by Tribune Content Agency, LLC.

Have you been trying to cut back on red meat? It could help you avoid a serious disease that affects tens of millions of people across the U.S.

People who eat two servings of red meat a week may have a higher risk of developing type 2 diabetes compared to people who eat fewer servings, and the risk increases with greater consumption, according to a new study from Harvard T.H. Chan School of Public Health.

The Harvard researchers also found that replacing red meat with healthy plant-based protein sources — such as nuts and legumes — or modest amounts of dairy was tied with a lower risk of type 2 diabetes.

“Our findings strongly support dietary guidelines that recommend limiting the consumption of red meat, and this applies to both processed and unprocessed red meat,” said first author Xiao Gu, a postdoctoral research fellow in the Department of Nutrition.

Type 2 diabetes is a major risk factor for cardiovascular and kidney disease, cancer, and dementia.

While previous studies have found a link between red meat consumption and type 2 diabetes risk, this study now adds a greater level of certainty about the association.

The researchers analyzed health data from 216,695 participants from the Nurses’ Health Study (NHS), NHS II, and Health Professionals Follow-up Study. The participants were asked about their diet in food frequency questionnaires every two to four years, for up to 36 years. During this time, more than 22,000 participants developed type 2 diabetes.

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The scientists found that consumption of red meat — including processed and unprocessed red meat — was strongly linked with increased risk of type 2 diabetes.

Participants who ate the most red meat had a 62% higher risk of developing type 2 diabetes compared to those who ate the least.

Every additional daily serving of processed red meat was linked with a 46% greater risk of developing type 2 diabetes, and every additional daily serving of unprocessed red meat was associated with a 24% greater risk.

The researchers also estimated the potential effects of substituting one daily serving of red meat for another protein source. They found that substituting a serving of nuts and legumes was linked with a 30% lower risk of type 2 diabetes, and substituting a serving of dairy products was associated with a 22% lower risk.

“Given our findings and previous work by others, a limit of about one serving per week of red meat would be reasonable for people wishing to optimize their health and wellbeing,” said senior author Walter Willett, a professor of epidemiology and nutrition.

The researchers also said swapping red meat for healthy plant protein sources would help reduce greenhouse gas emissions and climate change, and provide other environmental benefits.

The red meat and type 2 diabetes study was published on Thursday in The American Journal of Clinical Nutrition.