Choosing the Best Youth Savings Account
Early experience with a savings account and financial education can impact a young person's financial identity, attitudes, and habits for a lifetime. According to a study done by the University of Kansas, teenagers are twice as likely to continue to have savings accounts and four times as likely to invest when they open a savings account as a child. Picking out a youth savings account in the first few years of a child's life is an excellent place to start. An ideal youth savings account aims to teach children how to manage their money and is designed to encourage saving habits.
Here are some things to consider when narrowing down your choices of financial institutions for the best youth savings account.
Aside from allowance, most children and younger teens do not have a consistent income, so it's important to look for a savings account that has low or no minimum balance requirements. Some financial institutions offer savings accounts that have a minimum balance that is required to be kept in the account in order to avoid a monthly fee. ProFed is a great choice for young savers because there is no minimum balance required on youth savings accounts.
Savings accounts with low or no fees are a fantastic option. When looking at the differences between savings accounts, be mindful that there may be several different types of fees to investigate (monthly maintenance, per transaction/withdrawal, ATM card replacement, paper statement fees, etc.).
Certain financial institutions may require children to be of a specific age before opening a youth savings account. Many financial organizations will ask for a “Joint owner” or adult owner on the account due to this. It is best to reach out to the financial institution to determine what is required to open an account. At ProFed, you can open a new account at any age, but members under the age of 18 are required to have an adult owner listed on the account.
One of the objectives of a youth savings account is to familiarize your children with money management skills. Beyond the account, it's important for financial institutions to provide educational tools and interactive apps that teach kids about money and financial literacy. ProFed empowers future financial leaders by proudly offering Money Sense, a free financial education tool that teaches kids about saving, budgeting, and investing using real-life examples in a fun and engaging way.
With more than 57 million Americans using digital banking, early introductions to electronic payments prepare kids for how the most modern organizations conduct transactions. At ProFed, once a child reaches the age of 13, they may apply for a Student Checking account with a debit card. This checking account comes with additional accessibility to funds and the potential for additional incentives. It's also important to consider the advantages of fee-free ATM locations — an account with an ATM card provides your child more access and control over their money. Click here to learn more about ProFed's Student Checking accounts that include fee-free ATM locations.
Youth savings accounts typically provide variable dividend rates. ProFed's Great Start Program offers potential incentives for saving funds in a certificate in order to develop good savings habits and make more money on your funds. Contact us for details regarding our Great Start Program!
When you're ready to grow your child's allowance in a youth savings account, choosing an account with limited fees and high dividend rates is your best option and ProFed offers just that. As a ProFed member, you will be welcomed with kindness, treated with care, and empowered with financial wellness. So whether your niece, nephew, son, daughter, or grandkids are in need of a youth savings account, contact ProFed Credit Union.