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Kids Savings Accounts: Early saving
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There was a time that kids are given spare change or some money and this is often placed in a piggy bank at home. Since the child does not understand yet the concept of saving, the best way to teach will be putting this in the real bank.
This way, the money is kept in a secure place and this earns interest which will grow gradually in a number of years.
Most banks offer a lower minimum balance than those opened by adults. This is because kids don’t have that much cash to begin with and this is the first step in the journey.
The minimum deposit can be as low as $5.00 which can increase later on. The parent will be given a passbook and a debit card until the child is perhaps old enough to carry this around.
There isn’t that much difference with a regular savings account for adults compared to those for kids. The interest rates of the banks and other details are the deciding factors should the parents choose this bank over the other one.
The person should be aware that there are not that many big banks that offer accounts for kids. Instead of wasting time, the individual should go straight to small banks and those that are in the community.
A good program for kids is called the Savings Safari. This is offered by some banks and credit unions to teach children the value of money. Some financial institutions call this a different name but works on the same principles.
This begins when the parents have chosen a bank. The kid is given a toy as a welcoming gift. When it is the child’s birthday, something else is also given but this usually comes in the form of a few dollars that is added into the account.
The participating bank will do this until the kid has reached the age of 13. This is because the adolescent is already learning how to work for money.
Most of these banks will allow a limited withdrawal of three times in a given month. A statement just like those given to adults is mailed to the child so the family can keep track of money in the account.
The child and the parents are invited to special parties and events. There are games and prizes include gift certificates and some money that is also added to the existing account.
The aim of most banks that start with this program is to maintain a long term relationship. This could even extend to the next generation as long as the service and products are still excellent.
It is never too early to teach children the value of money. The parents can begin by opening a kid’s savings account in the bank which can be used as a startup fund for college or for things that will be purchased in the future.
The parents should observe the money market and the interest rates of banks that offer kids accounts. Some of these may offer something better than the others and should this happen; perhaps the person should consider transferring this to another bank.
The person can enroll in the program by going down to the bank of filling up the form online. The parents will then go with the child and make that first deposit which is the first step in learning the value of money.
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