One way or another, we all learn about financial realities such as service charges, interest fees, and payroll tax withholdings. As parents and guardians, we have an opportunity to not only soften the blow of unexpected changes in our children's money but to help them lead more secure and happy lives by teaching them financial literacy
Understanding personal finance at an early age helps people make better money decisions their whole life and even helps them become more successful. A recent study shows that it takes less than $500 in a savings account to make a child three times more likely to enroll in college and four times more likely to graduate.
One of the easiest and most impactful ways you can start your children's financial literacy journeys is to open a savings account for them. Let's look at how a savings account can help your children learn better personal finance skills.
A Savings Account Helps Kids 'Get' Money
Let's face it, money is less real than ever. With eCommerce on the tablet, app purchases on the phone, and credit card swipes at the store, the actual physical piggy bank becomes all the more important when teaching a child to appreciate saving and growing money.
Segue into a savings account, and your child will continue to appreciate how money grows as they outgrow their piggy bank. A savings account helps kids learn the concept of affording something, not just asking you to foot the bill! In addition, savings accounts help children learn basic math skills and introduce them to the concept of interest and how it works.
There are many other benefits to opening a savings account for your pre-teens, such as knowing how to write out a deposit slip, and budgeting spending money against savings.
There are few things in life as rewarding as saving up for something and achieving that goal. And--as a parent--it's fun to watch your child appreciate their accomplishment, too. If it means your kids won't be living out of your basement in their twenties and thirties, then what's there to lose?
What Should I look for in a Savings Account for Kids?
Most savings accounts for children are pretty basic. They mainly require an adult to open and are called joint accounts, which means that you and your child will co-own the account. That said, several differentiators can help you choose the best account for your budding financial guru.
Find a Savings Account Offer with a Great Interest Rate
Many savings accounts for kids offer little or no interest yields on the money saved, especially at big brick and mortar banks. Some online-only banks and credit unions have better offers but skimp on the features and services you and your child may need. USALLIANCE Finance's MyLife Savings for Kids account offers an amazing 2.00 APY rate of return on the first $500 deposited in your child's account. What better way to get them excited about savings than watching their money grow faster with an excellent yield on their account?
Find a Savings Account Offer that Continues Your Child's Financial Education
Now that you've gotten your child excited about saving money, where do you go next? Look for a bank or a credit union with tools, games, and budgeting aids that keep your child engaged when it comes to their money. Some banks and credit unions have graduated product offerings available as your child enters their teen years. At USALLIANCE Finance, your child's MyLife Savings for Kids account can transfer automatically into a MyLife Checking for Teens account when they turn 13.
With a MyLife Checking for Teens account, your child will learn how to manage their everyday spending money with access to their own ATM or debit card, instant check deposit, and USALLIANCE's award-winning banking app, recognized as one of the top 1 percent mobile banking apps in the country.
Look for Perks, Fees, & Minimum Balances
Many banks and credit unions require a minimum deposit amount to open your savings account, and others require you to maintain a minimum balance throughout the lifetime of your account. At USALLIANCE Finance, there is no minimum deposit amount to open the account, and you don't have to retain a certain amount of money in your account to keep it open and avoid fees.
In addition, USALLIANCE's MyLife Savings for Kids account offers some great perks, such as $10 in birthday bucks deposited into your child's account on an annual basis. The only requirement for a MyLife Savings for Kids account is that you are a kid!