Most of us were intimidated of banks as children – these places always seemed to be abuzz with a lot of frenetic activity with serious-faced people milling about all over the place. For many of us, it must have taken some amount of learning and training to get used to the concept of banking as adults. Some of us may still be intimidated by banks. We may be using only the basic features that these financial institutions provide, completely ignoring the vast plethora of features that exist in them. It certainly seems that if more of us had experiences with banks as children, we would have been better placed today to take these things in our stride. What is important is to know about and understand savings accounts for children.
We did not have much access to things like savings accounts for children and other child-oriented banking features in those times, but now we do have them. Apart from being a much valuable way of training kids in an important aspect of life – banking – this is also a way to make them better individuals later in life. It is no wonder when we see that all major banks worldwide have savings accounts for children now, which are more or less a lesson from their parents so that they can have better financial dealings in their later years as adults.
There are different types of savings accounts for children. The most common of these accounts – perhaps because of its simplicity – is the easy access account. Like other children’s accounts, you can make very small deposits in these accounts, and there are no restrictions such as minimum monthly deposits. The funds can also be withdrawn at any time with short or even no notice, and no charges are generally applied on the withdrawal. Since these are savings accounts, there is an applicable rate of interest on the deposits made in these accounts, which can be withdrawn at any time according to the policies of the accounts. One of the best banks offerings, as of the last statement I got, 0.50%, is Marcus by Goldman Sachs. To learn more on this online bank visit, https://www.marcus.com/us/en.
Though most of these accounts do not have many restrictions, you must know that there are some in which a notice period is required before you can make a withdrawal. These will also typically require a minimum amount of monthly deposit. But if the accounts impose such restrictions, they will also compensate for them with a higher rate of interest on the deposits made, which means the child can save a larger sum of money.
Those are the formal rules that apply to savings accounts for children, but we need to look at the larger picture here. These accounts are really helpful because they teach kids the importance of money and teach them how to save it. Banks and even the governments are going all out to inculcate these values in children so that the future generations do not suffer from the high levels of indebtedness that the current generation suffers. A small but significant step in that direction would be to train children in saving money when they are still young. Parents need to shop around and find out the best savings accounts for children. These could be some of the best gifts they can give to their children, which would last them a lifetime.
If you want to get better returns and set your children up for a financial future, you may consider opening a custodial account. This is when you open an account in your children’s name so you can purchase equities. And as we all know, these appreciate much faster than a savings account creating additional wealth for your child. For more on these accounts visit, https://kgmeyerpc.com/custodial-accounts/.
If you need assistance or require any help, feel free to reach out to me directly. And if you cannot, find a fee-only fiduciary Registered Financial Consultant near you.
