Children’s Savings Account for Early Financial Training

It is very important in today’s world to have a sound knowledge of managing finances. It is all the more important for children to have an early knowledge of managing finances, since it makes them ready to face the challenges that come their way, as they grow up. Savings accounts for children are the best way to make them learn about finances, along with saving some money for their future. 

Savings accounts for children do not necessarily give huge interest rates like the certificate of deposits or the savings bonds do. But it will actively involve children in the banking and teach them all the basics of banking at a very early age. Many banks offer these savings accounts, for children belonging to all age groups. Usually the banks require a supervision of a guardian or a parent until the child turns 13. The rules of savings accounts are different in every bank and so are the interest rates. 

Many banks have child friendly features like attractive bonuses and incentives to encourage the saving habit, money box facilities and even account names for their own accounts. It is important to let children make their own deposits and withdrawals, so that they learn the basic skills of money management. 

Savings accounts for children can be opened with very minimum deposit requirements. In some banks, children will not be able to make a withdrawal until they reach a particular age, but they are required to deposit a minimum specified amount every month. This will act in a way like a certificate of deposit, but will earn a much lesser interest. The parent can withdraw the money whenever the child needs it. 

If you have decided to open a savings account for your child, consider the following, before choosing a bank.

• Some banks charge a transaction fee for every withdrawal from a child’s savings account. So make sure that the bank you select has no such charges.
• As far as the child’s savings bank account is concerned, it is better to have the maximum flexibility. It is good to supervise your child’s finances, but not being able to withdraw the money is a huge drawback. So make sure you are ready for such restrictions before you sign up for an account.
• Many banks offer very competitive interest rates, and do not have a mandatory monthly deposit requirement. It is better to look for such deals, since it can be too taxing to deposit a fixed amount every month.