Opening a savings account is a wonderful way to teach your child about money and setting goals. By starting an account at an early age, a child learns how numbers relate to dollars and cents and can begin to understand the value of a dollar. By making savings accounts part of your children’s lives when they are young you will be helping them learn one of life’s most basic skills: how to manage their money.
Call your bank and inquire what types of accounts they have for minors. Many banks give special rates to children, both to encourage kids to save and to nurture their own future customer base. Look for an account that has no minimum balance requirements and no monthly fees.
Talk to your children individually about saving money and opening an account. This will make each realize that the account is theirs alone; a birthday is a perfect time for this process. Ask her how much she wants to deposit and how often by discussing savings goals; a good way to encourage this is to have three “money jars” in which she can divide money received from earnings, allowances and gifts. Suggest she label the jars “Savings,” “Spending,” and “Giving” to give her a sense of budgeting.
Drive your child to the bank to open the account, so he feels the importance of the occasion. Introduce him to the bank officer who will open the account and let him give as much of the necessary information as he can (name, address, phone number). Note that you will need his Social Security number as well as your own state photo ID to open the account, and you will have to co-sign the form.
Stand in line with your child and let her make the transaction with the teller. Banks can be scary to kids, and this is a good introduction to business procedures. Make sure she thanks the teller once the deposit has been made, and then congratulate her on her first bank account.
Finish the bank trip by making a stop at a local department store for an “official” bank folder for your child to keep her receipts in.