Kids Bank Accounts are children’s first step into financial freedom. Almost every bank offer young savers the opportunity to start saving at a young age, tempting parents with high interest child savings account, even free stuff and special discount codes in certain cases!
With this to bear in mind, choosing the best children’s savings account is tricky business. Consider the following when opening a kids savings account:
Ages of Child
Your child savings account needs to be based on the age of your child. Children at different ages have different requirements. For example, while a very small child may need only to deposit gift money, an older child may want to be able to take out money as well for buying toys. Consider how your child will be using the account when selecting the type of account.
The bank should be convenient to get to. Your child should be able to get there without to much hassle when he needs to. A neighborhood bank or one on a common route that you travel should do.
Much more important than location is online access to your child’s account. Children today are much more used to managing stuff online, and a bank account should be no different.
Online access means that your child is able to access the account without needing your help. It also offers you the chance to instill him with good privacy habits that he will need in the future. Thing as how to choose a strong password, where to keep it, how often to change it and much more.
Fees and Requirements
Your child savings account should have no minimum balance or maintenance fees. It should have free online access.
In addition, read the fine prints and make sure that there is no limit to the number of small deposits, and no fees for inactive accounts.
Type of Bank
The first bank you check will likely be your own bank. Having your child’s account at the same bank you’re using is a good idea, since your bank may offer additional benefits to your child because of you.
If however they don’t have an account that meets the needs of your child discussed above, check out your local credit union. Credit unions often have lower fees since they are member owned.
Another very good option is to consider opening an account at an online bank. They offer very good conditions, your child will have better access to the account, and it will better prepare him for the future.
Saving Schemes and Programs for Children
Inquire about services offered for children at the bank you are considering. Your child’s account may be eligible for tax incentives, improved interest rate or special kids saving plans.
Your child’s account is going to serve him for many years, making the offered interest rate an important factor. Different banks offer not only different rates, but also different rate structure.
Explaining your child the power of compounding is much easier if the account is earning interest.