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Teaching kids about money at home is one of the most important lessons parents can give children. The ability to learn how to make money work for you rather than you for it is a critical leap of knowledge most kids simply don't make. A savings account for a child at a young age can be an important starting point for a lifetime of learning about what money really is and how it works.
If You're Going to Go Through the Hassle of a Savings Account... Go All the Way
I believe the best savings account for kids is an online account linked back to a local savings account. I think it is important very early on to educate children about the differences between rates of return and the usefulness of both types of banks (local and online). Both types of saving and loan banks serve a purpose for families and understanding how the two are the same and different will start your child down a good life long learning path.
There is no doubt that most people find finance and banking utterly boring. It simply is what it is. On the other hand there are a few fundamental concepts to teach children at an early age that will help them intuitively understand more important financial aspects in later years.
First among them is to differentiate between banking offers. Figuring out the best savings account for kids at your children's ages is a great opportunity to explore the different offerings in the saving marketplace and including the kids in the discussion.
Topics to discuss might include:
What is an interest rate?
In what country is this bank's headquarters?
Why does the bank pay me to hold my money?
What does FDIC mean?
How can I track my money with the computer?
Which bank has the highest rate?
Online Savings Accounts Force Parents and Children to Learn Fundamental Financial Skills
All of these factors should be a part of parents' discussion with children about which is the best savings account for kids. It is also perfectly alright to have the conversation more than once, as needs change and the child grows.
Parents who take the time to learn basic business and banking information for themselves become well prepared to teach and demonstrate finance to their children. Given that public education is virtually devoid of teaching of basic home finances any pointers parents give their children are vitally important, because they won't get that information elsewhere.
While ultimately the lessons of basic money management are dull they are important. Here are some tips to help make the discussion about a savings account for kids more fun and meaningful to them.
Disclaimer: All information on this site is provided for informational purposes only! By no means is any
information presented herein intended to substitute for the advice provided to you by any health care or other professional
or organization.
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