The benefits of opening a savings account for your child

Healthy habits begin at a young age. Having a savings account for your child offers them many opportunities to follow the path towards a financially successful future.

When you child has a savings account, it gives them a dedicated place to put money towards larger future goals. It also gives you the opportunity to teach them many valuable financial lessons.

What can a savings account do for your child?

  • It helps them plan ahead. Whatever their goals may be- whether it’s to save for a new gaming console or their first car, a savings account becomes an invaluable tool when planning these goals.

  • It teaches them the basics of interest. You can check in on their account with them and show them the dividend deposits into the account. Take the opportunity to explain to the why this extra money showed up in their account, and how it has the opportunity to grow more.

  • It helps them stay focused. The old adage, “out of sight, out of mind” comes into play here. When they are saving their money in a piggy bank or shoe box, the temptation to take the money out can be too great. Putting the money adds a degree of separation that gives the child extra time to remember the reason they are saving their money instead of spending it on other things.

  • They learn basic transaction skills. Whether they’re conducting their business online or in a branch, involve them in the process of withdrawing, depositing, and checking on their account. These basic skills are invaluable in money management.

  • They learn “money math.” Having a real-life scenario to apply their math skills to kicks their critical thinking into high gear. If they withdraw money, ask them how much will be left in their account once they take the desired amount out. Before making a deposit, ask them how much they think their new balance will be. Seeing the concepts they learn in school applied to their own life will help hone their skills.

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In short, a savings account goes beyond putting money in for their future college career. When you give them an account of their own and empower them to make their own financial decisions (with guidance), they will learn invaluable financial skills. Their successes will give them confidence in their financial literacy, and their mistakes will teach them important lessons while the stakes are still low.

If you are interested in opening a savings account for your child or grandchild, give us a call at (504) 885-6871.

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