Kids Savings Accounts
Even as a baby, many children’s financial futures are being planned. Parents are already thinking about college costs, unexpected expenses and how being financially responsible will help serve their children in the future. Savings accounts are an effective way to help save for these events, while also teaching children the banking tools he/she will undoubtedly need later in life. There are several items to consider once you decide to open a savings account for your child.
The type of financial institution you choose is important. Your own bank will probably be the most efficient location. Since you already have an account there, the bank may be able to link your child’s savings account to your own, providing you with easier access to it. If not, finding a bank or credit union located in close proximity to your home will be convenient for trips to the bank with your child.
While location and convenience is important, you should also consider any fees and interest that are associated with the account. The majority of banks offer accounts for minors that are usually fee free, with little requirements and higher yielding interest rates. However, there are some minor savings accounts that require a minimum balance be kept at all times or else fees are accrued. There may also be transaction fees to be aware of; these fees can add up quickly if the account belongs to an older child who is learning how to withdrawal money as needed. The upside, higher interest rates mean the more money you or the child deposit, the more money you gain.
A number of banks offer special programs for children who have an open savings account with them. For example, one bank may match each deposit made by the child up to a certain amount. Another offers tours of the bank to show your child how the banking process operates. Birthdays and holidays are sometimes celebrated with small monetary gifts that the children may deposit into their account.
Investing in a child’s future is important on many levels. Opening a savings account and providing your child with that financial knowledge will be one of the most beneficial acts for helping take care of any unforeseen expenses and insuring their success as they get older. Take the time to find the right bank, account and children’s program and watch your children grow, learn and become financially self-sufficient young adults