Children’s Savings Accounts
If your son or daughter’s piggy bank is nearly overflowing, it may be time to consider opening up a bank account for them. An account helps teach children how to keep track of money easier. There are a few different types of savings accounts that you should consider for your child.
A savings account can be started as soon as a child has money to put in one. Choose a day when you both have some free time and make a trip to your local branch of the bank. Talk to a teller or bank associate about starting an account for your child.
Together, you can open a statement savings account. Statement savings accounts give you a monthly report of all activity. You will be able to see all deposits that your child has made, and any withdrawals that you have made together as well.
You should look over each statement carefully with your child, and explain all aspects of it to them. Show them the amount they started with, interest they accrued, the final amount, and any other activity. If your statement shows the withdrawals without the description, you can write the details on the statement to help the child track how they are spending their money.
You might also be able to get a passbook savings account. Each account holder is given a small “passbook”, and the book is run through a machine which records all of your transactions. Your child can find out their balance right away, rather than waiting for a statement. Kids tend to like this, as they can look at their current transactions and balance whenever they want.
Aside from bank accounts, you can also go to a credit union to get a savings account. They offer accounts for children of their members, which are designed for children of different ages. When they get an account, they may also get an ATM card (with or without their photo on it) and other gifts for starting an account.
An ATM/debit card can be used as cash by your child for their purchases. Parents can keep the receipts and teach children how to check them against their savings account statements each month. Allowance money can also be deposited in the savings account each month.
If a child is under eighteen, some states will issue custodial savings accounts. These accounts list the parent’s name as the account holder and the child’s name underneath. The account ownership can be transferred to the child when they turn eighteen.
Savings accounts are a great tool for teaching money management skills. Kids can keep track of their money easily and even use an ATM/debit card to make purchases or withdraw cash.
Tags: Finance
