How to Choose the Best Savings Account for Your Kids

 

After you’ve explained the importance of saving money to your kids, you have to provide them a place where they can keep their money. Opening a savings account is the next step in this regard, but this can be a daunting task when you realize the number of options that you have to choose from. Here are some tips to help you:

Factor In the Bank Location

One of the first considerations you should have is the location. You have to make sure that it is easily accessible for you and your kids. It may be worthwhile to consider a bank located in a common route that you often pass by. Ideally, you should open your child’s savings account in the same bank you use so it will be easier to coordinate the visits. 

Consider Fees and Requirements

Most bank accounts will require you to have a maintaining balance. It is always best to check if they have monthly maintenance fees that your child must adhere to. Do check out as well if the bank has fees for inactive accounts or limits on small deposits. Since the bank account will be for your child, it might be best to check these, especially if your child plans to make small deposits every week. 

Age of Your Child

The best savings account to choose for your kids will depend on their age. Make sure to check with your bank to see what types of accounts are allowed for your child’s age. There are banks that will provide your kids with their own ATM card or checking account. Think about how the account will be used to help you choose the best option. 

Consider Children Incentives

Some banks will provide children with special incentives. Some banks will give the children piggy banks so they can start their savings and deposit the money when it is full. Check them out, and you’d be surprised to see how many children programs are available in your area. Plus, you can take advantage of these offers as valuable money-saving teaching tools for your kids. 

Clarify Interest Rates

Some banks will have different interest rates for children’s accounts. Be wary of accounts that do not have maintaining balance, as most often, they are not also earning interest. If your child plans to keep the money for the long haul, it will be best to get an account that has a maintaining balance and earns interest at the same time. This way, it will be much easier for them to grasp the power of compounding interest.

Embrace Digital Banking

If your child is already a teenager, it might be best to choose a bank that offers digital banking so it is much accessible for them in case they need the money for an emergency. Make sure to teach them about protecting their accounts from phishing or other malicious deeds that can compromise their accounts. 

Checking Account Offering

If your child is already a teen, it will be best to go for a bank that will provide them with a checking account in tandem with their savings account. Checking accounts are best used for their daily spending. 

Teaching the value of money to our kids can help them grow to become mature and responsible adults. Provide them the opportunity to save money by assisting them in opening an account under their name. This way, they can be motivated to set aside money and save for their future. Make sure to include them in the decision-making process as part of their lessons. 

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