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Savings Accounts For Kids: The Banker or the Parents

It is our job as parents to bring our children up with morals and values. What better way to help them learn the value of a dollar than by forcing them to use a savings of some sort. This process can teach them that saving money is of the upmost importance. Children these days have little understanding of how things are paid for. You are responsible for making sure that they understand how to make and save money. The way to do this is by giving your child a way a means to make and save money. If it is your intent for your child to save their money for a specific item, such as a vehicle you are going to want to hold onto their savings yourself. Placing money that will only be saved for a short amount of time into a savings account will cost more money than will be made in interest. Conversely, if your intent is to have them save for longer term goals such as college or a home, you will need to use a savings account from a reputable banking institution.

The Means:

There are many ways in which you can direct your child to make money, you can have them do chores and give them a weekly allowance or have them get an outside source of income. This is an easy obstacle to overcome. Look in the classifieds for jobs that are issued to teenagers. There are many jobs available, from bagging groceries to mowing lawns.

You, the Banker:

Should you be planning to use their saving to purchase them something within a year, then you will be better off holding on to their money rather than placing their money into a savings account. With any savings account there are penalties that are associated with withdrawals and usually a minimum amount required to begin an account.

It is also beneficial for your child to watch their money grow visually. You can show them their money every so often in order to keep their ambition going. When their ambition is steadfast, the more they will be willing to save.

Banking Institutions:

Many banking institutions offer a higher interest pay out when the parent opens the account as a duel account holder. Keep this in mind when you go to open an account for your child. The main reason you would want to open an account for your child, is going to be for long term savings. If you are trying to help save money for their college education, a savings account can be very beneficial. You can earn money in interest on top of the already saved funds.

Most banking institutions offer a way to view the funds and interest earned online. This is a great way to keep your child involved with their savings and can keep them excited about saving and earning money. Make sure you are using an insured banking institution and one that is very well known and reputable. Banks go under all the time and if one was to go bankrupt before your child is able to use the funds saved, it would defeat the purpose of this process being a learning experience.

The Goal:

The goals of getting a savings account for your child are many. They will learn a very valuable life lesson as well as save for a future that they can call their own. Being a parent, this is one of your many responsibilities. This is not tough love, it is essential love.