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Considering A Child Savings Account?

Friday, August 6, 2010 - 5:00 AM
A savings account for a child can help teach the child about banking and saving. This Bankrate.com article has a few tips for those opening a youth account. With interest rates so low, your kid may not have much fun watching the balance grow. However, some banks and credit unions have a child savings account that offers a high yield for small balances. DepositAccounts.com now lists these in our children's savings accounts table.
1
Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
Rep Points: 125,077
1. Saturday, August 7, 2010 - 6:19 AM
I would like to, but it isn't worth it to drive my kid to the bank. 

It makes more sense for me to BE my kid's bank.  It's cheaper for me to build a simple spreadsheet, and pay him 5%-10% on his small balance, than to pay for the gas to drive him to the bank.  It's cheaper for me to NOT drive ME to the bank...the gas eats up so much of the weakly (I know how to spell weekly) interest, it's just better to use computers.

For example:  kid has $100.  @10%APY=$10.  Divide that by 52 weeks, and you've got $0.19 (cents) per week, interest (I know compounding is different, just work with me here :).  Even if your kid has $1000.00, the weekly interest @10% is $1.92.  Still not worth the gas trip...  not to mention, the bank isn't offering him anywhere near that kind of interest.

And, everyone wins this way.  I spend less $ for gas (for me and my kid).  And He gets back that excitement we use to have, earning 5%-10%. 

The only thing I haven't got set up here, is tax liabilities...  since it's all still under my tax #.

If anyone else has other ideas, I would be very interested...  I'm always learning.

Thanks, Mike 
4
MikeMike327 posts since
Feb 22, 2010
Rep Points: 876
2. Saturday, August 7, 2010 - 5:20 PM
At 10% interest your kid may never open his own account. lol
44
tightwadtightwad27 posts since
Jun 7, 2010
Rep Points: 856
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