Such accounts can be opened through your bank or credit union and provide a source for saving toward important goals including college and marriage. Interest rates on savings are negligible, but setting aside money on a consistent basis can prove advantageous and yield the following benefits.
1. Kids’ savings accounts are easy to open. To open a savings account for your child, typically all you need to furnish is your personal information including your address, phone number, a Social Security Number and show your driver’s license or a passport. You may need to supply your child’s SSN too.
2. Your child can contribute. You can set up the savings account so that your child has access to it. This can be a great way for your son or daughter to take earnings received from leaf raking, snow shoveling or babysitting to save toward a goal.
3. A savings account teaches your child about money management. With an account in your son’s or daughter’s name, he or she can learn about personal finances. One lesson is that savings accounts typically offer little return on the money and yet these accounts can be a good one for youngsters to learn how to save money for themselves.
4. Some financial institutions offer a bonus. Though most savings accounts pay a paltry interest rate, such as 0.25 percent, some banks give youngsters a bonus if you already have an account with them. For instance, ING Direct pays 0.75 percent and has no minimum balance requirements nor does this bank charge a monthly fee. Some banks also kick in a few dollars when children open an account. That account may be in your name as custody for your child.
5. An account can be accessed online. Let your kids understand how the Internet works by allowing them to view their accounts online. Some banks forgo statements, allowing depositors to view account balances and statements online. Your children can track their money, set goals and learn about financial management right online.
Check with your bank or credit union about available accounts for young children. Some banks no longer offer these accounts, so look beyond your current financial institution to find one that supports families by offering savings accounts for dependent minors.
See Also — How to Open a Savings Account
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