Children's Savings Accounts
One of the most important things you'll teach your children is how to handle money. Saving for the future is one of the most basic concepts, but it's hard to do. Get them a savings account while they're young and help them establish the good habit of saving money.
Where should you open a savings account? The most popular choices are banks and credit unions. Both have simple savings accounts where your child can deposit money, even small amounts of money, and watch the balance grow.
Childrens Savings Accounts
Your child will probably keep this savings account for many years and may even choose to open a checking account at the same institution when he or she is old enough. Here are some things to consider when choosing place for your child's first account.
The employees at the bank should be willing to talk to kids. This is true whether it's a brick and mortar bank near you, or an online bank.
Interest Rates / Fees
The interest rate will be really low on a plain run-of-the-mill savings account, but that's okay. The idea is to start socking money away. There shouldn't be any fees, though, if you treat it like a savings account. Some banks charge a fee if you have over a certain number of withdrawals a month. That shouldn't be a problem if you're trying to teach a child to put money in the bank and leave it there.
Watch out for fees if the balance dips below a certain amount. If you make sure you know what the minimum balance is, and open the account with at least that much, you should be okay.
Safety
This account probably won't have a lot of money in it, but it's good to get in the habit of looking at insurance. Banks are required to carry insurance on all accounts for up to a certain amount. Credit unions have a similar requirement. If you're opening an account with any other kind of financial institution, make sure to ask what the coverage is and who the insurer is.
Accessibility
Although you don't want to make frequent withdrawals, access is important. Your child should be able to deposit funds and see their account balance. An online bank is fine, as long as you think about how you're going to make deposits. Can you transfer funds from your checking account? Do you want your child to walk into a branch and deposit cash? Most financial institutions offer online banking. Your child should be able to log in and see what his balance is. Make sure there is no fee for online banking. Most banks offer this service free of charge.