You explained to your child how to save money. After taking your lessons to heart, your child has filled his piggy bank to the top! Now it’s time to find a savings account for him to deposit all his coins and watch the money grow.
Before you select a bank to open the savings account, you’ll want to consider the proximity of the bank to your house. In addition, you’ll need to review the terms and conditions of the account including the fees and interest rates.
Is the bank convenient for you to get to? If your children embrace the idea of their own savings accounts, they may want to make frequent trips to the bank. Consider a neighborhood bank, one on a common route that you travel, or inside your local supermarket to keep the trips from turning into a hassle.
If you frequently go to the bank, it may be very helpful to open your child’s savings account at the same bank to coordinate visits.
Fees & Requirements:
Find an account that doesn’t have monthly maintenance fees or minimum balance requirements. In addition, make sure there is no limit on the number of small deposits. Also watch out for banks that charge fees for inactive accounts and read all the small print before opening the account.
If you are using a bank that provides a free savings account tied to your account, find out what happens if you move your account to another bank. Can your child still keep his account open?
Type of Bank:
The first bank you check will likely be your own bank. If they don’t have an account that meets the needs of your child based on fees and requirements, check out your local credit union. Credit unions often have lower fees since they are member owned. In addition, you can explore an online bank if you feel you don’t need to make the physical trips to the bank to teach your children.
Ages of Children:
Based on the age of your child, your account needs will have different requirements. For savings account for a baby, you may only deposit gifts of money. For an older child, they may want to put money in and take it out to buy a toy. For a savings account for a teenager they may want the ability to link it to a checking account. Consider how you will use the account when selecting the type of bank and account requirements.
Programs for Children:
Ask about services offered for children at the bank you are considering. Some banks give piggy banks to children to start collecting their coins and provide free coin counters in the lobby. Other banks allow children to go behind the counter and see the safe. The extra services are very valuable teaching tools.
Don’t forget to look at the interest rates on the account. It will be much easier to explain the power of compounding if the account is earning interest. In addition, two banks may have very different interest rate structures.