Your Child’s First Savings Account
Friday, Jul 3 2020
There’s no better way to help a child learn the value of saving money than to actually help them do it. One way to get them started: Make three jars. Label one for “playing,” one for “saving” and one for “sharing.” When they get a little older, it will be time to introduce them to the credit union. Let’s talk about your child’s first savings account.
How Does It Work?
Obviously, children can’t enter into contracts with financial institutions on their own. As a parent or guardian, you retain overall control of your children’s accounts. You can set parameters to grant your children more control and more access to their accounts as they grow older and more mature, and you can revoke it at any time.
Children’s savings accounts are generally designed to accommodate smaller account sizes. Many will have no monthly or annual fees, for example, and will have very small (or no) amounts required to open an account.
Keeping Children in Mind
Remember that children may want to make a lot of small deposits. For example, they may want to visit the teller every week when they get their allowance. Look carefully at the paperwork when you open the account. Some institutions may charge a fee for frequent teller deposits.
Children will also frequently walk or ride their bikes to do their banking. If your child isn’t old enough now, it will happen soon enough! Look for a local branch in a location that is safe and bike-friendly.
If you can, look for a savings account that earns dividends. This will help you teach your children the value of compounding interest.
Small children grow up to be teenagers. Eventually, they will need a checking account. Is your child old enough for a checking account yet? Here at Focus Federal Credit Union, our student checking accounts are designed for 13-21-year-olds. When he is, can the savings account you open now be linked to a checking account?
Remember that young people make mistakes with money. Will, there be an overdraft protection feature available to cover the cost of the expense and spare them the embarrassment should they accidentally overdraw that account? If so, what fees are associated with it?
Also, ask what will happen to your child’s account if you have to move. Some institutions may require the parent or guardian of a minor account holder to also have an account with the same bank or credit union.
Visit a Focus Federal Credit Union branch today to open your child’s first savings account or go online. We’d love to be a part of their financial journey starting with learning the power of saving!