Kids savings accounts typically give parents joint ownership. That means mummy and daddy can manage the finances until the children are ready to do so on their own. Because of that setup, your child probably won’t have to meet an age requirement to open an account.
According to www.nerdwallet.com, a bank will probably suffice for most children younger than five. But once that money starts accumulating, you will want to give it the opportunity to grow.
Before you open an account, take some time to find the best bank, or an online-only bank for you and your child. Keep an eye on the following:
No minimum balance requirement or monthly maintenance fees: Children should see saving as a good thing.
A good interest rate: A parent should look for an account that can attract interest rates.
Online or in-person access: Walking into a branch office is a good way to help your child become familiar with routine transactions involving his or her account. Your child’s online habits – even financial – can be important, too, so check for features such as monthly statements and controls on payments and transfers from savings accounts. You can teach money management and Internet safety together.
Additional perks such as ATM card: An ATM card can show your child how transactions work and how to withdraw cash when you are on the go.
Opening a savings account for your child is not much different from getting a new account for yourself. Once you have found a good bank, schedule an appointment to visit a branch office. Encourage your child to put money in the account for the first time that day, and see if the financial institution offers candy or other freebies to reinforce the positive experience.
After putting money into your child’s savings account, start teaching your son or daughter how to perform basic banking tasks. Demonstrate how to use an ATM to deposit birthday or holiday cheques or money earned from chores.
Prioritising saving over spending is a valuable life lesson, one that takes time to learn. Opening a savings account for your child is one of the best ways to introduce that concept at an early age.
