Child Saving Account
Child Saving Account I think many of us have learned a valuable lesson lately about living within our means and saving a little more. Now we can teach our kid's the same valuable lessons and help them open their own child saving account. If your child is earning a little money from allowances it is a great opportunity to help them learn this valuable life lesson. Taking your child to the bank and allowing them to open their very own account can provide them with an enormous sense of responsibility. Opening an account for your child is not a whole lot different than opening one for yourself. There are some things you will want to consider. Here is a list of some things to look into before you choose the financial institution to open your child's account: 1. Most people will just start at their own bank and that is fine if you want to do it that way. But, many banks today are getting quite competitive in this market. Some banks may offer a little higher interest rate, for example. They like to get the children as customers early knowing that most of them will continue to be customers when they grow up. Banks also know that if a parent gets an account for their child at a certain bank the parent is much more likely to remain a customer too. For these reasons it might make sense for you to spend some time and look at several banks (and credit unions) in your area. Compare rates as well as what other perks your child will receive from their account. For me, I would stick to offline banks for a child's account. Why? Because the child can actually physically take their money to the bank themselves. I think it will make the experience seem more 'real'. I feel like the child will experience a sense of pride actually going in them self and making a deposit. It's just not the same online. 2. If your child is under 18 the bank will likely require you to either set the account up as a joint account or to name a director for the account. For most people, this will just be one of the parents. That will make it the easiest. Remember that a director of the account will have full and total access so if you choose to set someone else as a director, only choose someone you trust completely. 3. Obviously, depending on the age of your child, you might need to help them with deposit slips, etc. To help them get the most of out their banking experience, you may want to help them set up some sort of a chart or graph where they can visually see their money growing. This is yet another way for your child to get excited by the process. It is probably a good idea for you and your kid, if they are old enough, to set limits. It's usually most effective to allow a child who is a little older to have some access to their money. If they never get to touch any of their money they are likely to shy away from saving when they are older. It's best to allow them limited access to their money. Say that out of every $100 they save they are allowed to spend $25 of it. You choose the exact percentages but allowing them the fun of spending their money is important too when you set up a child saving account.