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Savings Accounts for Children

As the number of adults who save money regularly in savings accounts decreases, it’s becoming harder than ever to teach children the importance of saving. Whether you start them out with an old-fashioned piggy bank or give them their own passport savings, the idea remains the same: teaching a child to manage their finances helps them as adults. They’re more likely to understand that keeping up with increasing costs starts with a healthy savings account.

Opening a savings account for children helps you teach them the discipline necessary to save a portion of everything they “earn”, as well as show them what the rewards of careful money management can be. Accounts that are specifically designed for children have many of the same features of adult savings accounts.

Among the most popular savings options for children are easy access savings, where any money deposited is available instantly for withdrawal and without penalty. Just like with adult instant-access savings, the interest rates on these accounts are much lower than interest earnings on accounts where you have to leave your funds in for an agreed upon period of time. The highest rates of interest can generally be earned on fixed term or bond accounts, with money invested for one to five years; or until the child reaches a certain age.

No Minimum Age Restrictions for Savings

A child can have a savings account in their name from birth. In fact, many local banks view the baby announcements in the newspaper regularly to send postcards of congratulatory messages and let the parents know of the children savings account options. The parent or guardian of a child will manage the account until the child is a certain age, but there are no minimum age requirements to have a savings account. When the child reaches 18, typically the account will be converted to a regular adult savings account, or perhaps a student checking account.

Just as with adult accounts, banks will often offer special gifts or incentives for opening a child savings with them. Just remember not to be convinced of the account because of the gift – take a close look at the interest rates and other details for the account before making the decision.

Here are some tips to consider when thinking about setting up a savings account for your children:


  • Starting children with savings accounts while they are young will enable you to teach the value of money and get them into the habit of saving a portion of all of their earnings. These good financial habits will carry with them into their adult years.
  • There are more than 150 different types of savings accounts designed for children, so try to decide what features are important and which features you don't care about to narrow down your choices.
  • One way to narrow down the choices of savings accounts is to determine whether your child needs to have instant access to the funds or whether it makes more sense to benefit from higher interest through fixed term bonds and long-term savings options.
  • Don't be swayed by free gifts banks provide in order to attract new account holders. While children will be thrilled with their special gifts, it's more important that the account has the features you need or want most in a savings account for your child.

Teaching a child good money management starts when they are young children. Show your child how to save a portion of all their earnings, and they will take this life skill with them as they grow to be adults. This skill alone can keep them out of most financial situations that people are facing in today's tough economy.

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Ok, I am 13 and I am going to be 14 in a week or so and I wanted to get my own savings account so that I could save money for college or maybe a car if I get a scholarship. I was unclear on whether it is illegal or if a minor cannot access their account until 18 or another age. Can I have a savings account that I can use when im, say, 16?

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