Have you ever thought about opening a savings account for your child? You might not think so, but even a small one can make a huge difference in their future and how they handle their finances when they grow up.
According to a recent study, children from low-and moderate-income families with savings account for their college are three times more likely to go to college. They are also four times more likely to graduate – even if their account only has $500 in it.
In this post, Good Neighbors Credit Union talks about the importance of having savings account for your child:
Planning for the Child’s Future
One of the reasons parents open bank accounts for their children is that they want to set them on the right path for the future. Not only will this introduce their children to the concept of saving, but it will also serve as a starting fund for their future, especially for college.
However, there may be some hoops to jump through when opening an account for a child below the age of 18. For instance, you may be wondering under whose name the account will be, whether they can sign for it, and other concerns.
Knowing the Rules Better
To help parents, federal banking regulators have issued clear guidance for banks and credit unions to follow when parents ask to open savings accounts for kids below 18 years old. What this means for parents is that:
- Youth savings accounts are protected by federal consumer protection laws and regulations like any other type of account.
- Many schools are working with local banks and other financial institutions to educate children about financial matters and provide them with opportunities to open their bank accounts. The new guidance explains in detail the federal rules regarding the accounts that can be opened at schools.
- There are some states that do not allow minors to open their bank accounts, but a parent can open one for the child and put both of their names on it.
Why Credit Unions Want Your Kids to Grow Financially Strong and Stable
All credit unions have a basic business model that they follow – members pool their money (they are buying shares in the cooperative) to provide loans and demand deposit accounts or other financial products to each other. Any generated income is then used to fund projects and services benefiting the community and the interest of the union’s members.
The difference between credit unions and other financial institutions is that they are not-for-profit. One of their founding principles is education, so they truly want their members to succeed and achieve economic growth.
Why You Should Open a Bank Account for Your Child
There are many reasons to open a bank account for your child. For one, they can get a head start on handling and managing their own account. While there’s a learning curve to this, the earlier they start, the sooner they’ll understand how things work. It will teach them to plan ahead and focus on their goals.
As they see their money grow, they’ll be interested in growing it even bigger. They’ll learn the concept of saving for a rainy day and not spending all their money on things they might not need.
Opening a savings account for your child is one of the best things you can do for them, and it’s certainly a great start to raising a financially educated individual. It is also a great way to help secure their future. If you are thinking of opening a savings account for your child in a Buffalo credit union, Good Neighbors Credit Union has the Little Neighbors Savings Club for your child. Learn more about our youth savings account today and start saving with your child!