As we grow and mature into productive adults, people naturally come to understand the value of saving, either for future unforeseen events or for general financial security. However, as is the case with many other habits or proclivities in life, saving is much easier if it’s learned as a child, and developed throughout your lifetime.
Instilling good saving habits are something that can start very early with your kids. The age-old piggie bank never goes out of style, and is a tried and true option for illustrating how the saving process is about time and consistency. A second important point to remember is to teach by example. Anyone who has children understands this immutable fact — Junior is bound to mimic your habits, regardless of whether they are positive or negative. Saving money on a consistent basis definitely falls into the former category.
A final point to keep in mind is to help your children establish goals for their savings. Whether it’s for that new bike that he’s had his eye on, or just a certain amount of money saved — say, $100 or $200 — starting on a set date with a goal mind and then achieving that goal is bound to teach the desired concept of saving.
So what are the best savings accounts for kids? Read on, as we delve into some of the top options, depending on your needs and wants for your child (or children).
THE TOP INTEREST CHOICE
If achieving the best interest rate is what you’re looking for, the Barclays Dream Account just might be the perfect place to start. Boasting an impressive starting baseline APY (annual percentage yield), this superior choice allows you to lock in higher rates based on consistent saving habits. For example, if you make deposits for six consecutive months, you’ll earn a retroactive 2.5% bonus on the interest that was earned over that time period. In addition, another 2.5% bonus is given for not withdrawing any money for six months in a row. What better way to illustrate the value of saving to your progeny?
The Dream Account is open to any child under 18, and does not charge a monthly service fee or require a minimum deposit. The only possible drawback is that Barclay’s has only one singular branch in the United States — you’ll need to have no qualms about banking online.
Other features of the Dream Account are that parents are allowed to deposit a maximum of $1,000 to the account every month. Plus, transfers from accounts that you might have at other financial institutions are free. Your kids are allowed to set up their own username and password for online access — which can help foster autonomy and management skills — but only adults can make withdrawals.
The youth of today are much more tech-savvy than their parents. The odds are that your situation isn’t any different. Discover Saving Account offers various online tools and a user-friendly website that gets rave reviews across the board from customers. For our purposes, its children savings account is a step above the competition. It logs in with an APY of 0.95% which is very good. Also, the bank does not carry a monthly service fee or have a minimum opening deposit requirement.
Using the handy tools offered by Capital One 360, you can help your kids formulate automatic savings plans and set up goals to track and modify as needed. Your child can track and check their balance — you as the parent can initiate transfers and withdraw money. There are no fees incurred for transfer received from external banks, and the account is available to anyone under 18 (with an adult co-signer, of course).
TRADITIONAL BRICK-AND-MORTAR BANKS
The myriad advances in online banking have resulted in people having the latitude to complete most banking activities without leaving the house; however, making the trip to an actual bank can be a rewarding experience.
If you find yourself wanting to pack the kids up and visit a brick-and-mortar operation, one of the premier options is Wells Fargo. They offer youth savings accounts, and the convenience of over 6,000 branches across the country means you probably won’t have to travel far.
As far as features, the youth account’s 0.01% APY is not the best, but as with the online options, the account is free of charge. The website does offer an attractive platform for your youngsters, and there are no restrictions for anyone under the age of 18.
Teaching your children good habits is a big part of the parenting experience. Saving money and developing goal-setting skills certainly qualify as habits that you’ll want to pass along to your little ones. These are valuable lessons that can last a lifetime.