Securing a savings account for children

With the economic hardship still felt today, it is reasonable for parents to get a savings account for their children. If before it is not necessary to have one because of the security of jobs that the economy held, now it is quite essential to get one for our kids because of the status of unemployment in the country. Because of this, it is understood that the reason for opening a savings account for them is to secure their future. However, it is important that they themselves also know the significance of it. So, here are some ways on how you can explain to your kids the value of keeping their money in a bank account.

Piggy Bank versus Savings Account

Most children only know the basic use of money and that is they can exchange it for something that they desire. Most children do not look at the big picture that includes the value of saving up. For starters, you can explain to them why people save up and how they can benefit from it. Since they are children, use an example that they can easily relate to like how saving up can help them get the toys that they want or how they can have something there for emergency purposes, and the like.

Next, explain how savings accounts work. The easiest way to communicate the mechanics would be to differentiate it with how a piggy bank works. It is not necessary to give out specifics about interest and other technical terms in a savings account. You can just explain that a piggy bank does not have the ability to make their money grow like a bank does. Plus, banks can protect their money from being stolen more effectively than keeping a piggy bank.

In picking out their savings account, make sure that they participate. Bring them when they open their bank accounts so they will feel engaged and in control of their money. This will give them sense of responsibility.

The Parents’ Role

As parents, we need to make sure that we get the best deals for our children. There are several banks out there that are offering freebies and high interest rates for opening savings accounts for children however, let us not forget that banks are a business. The conditions that they have may be at the end in their favor so we should be careful on the offers that banks provide. There are institutions out there that are more inclined with the needs of the customer and that we should find for our children.