Maybe you’ve showed your kids how to spend wisely and how to save through a piggy bank. Now that they’re teenagers, they have to learn new money skills such as earning money and managing it. It's now time to teach them how to use a bank and how to open a savings account.
While your teens may be excited about making money from their first job, you also have to teach them not to spend it all. Whether they’re flipping burgers, bussing tables, or babysitting, saving is an important lesson in financial stability.
When introducing your kids to the world of banking, you’ll need to consider fees and requirements, the location of the bank, the age of teen to open a savings account, and earning interest on a savings account.
Fees and Requirements
Naturally, the first place to look into is your own bank. You’re familiar with its policies and people, and you can introduce your kids to the people you know there. But first, you must consider fees. If banking fees are prohibitively high relative to your kids’ paychecks, the next place to look would be credit unions. Since they’re owned by members, credit unions have lower fees. You might also want to look in online banks.
After looking into fees, you’d want to consider requirements. Your teenagers need accounts without minimum required balance and without monthly account maintenance fees. Their accounts should also have no limits on the number of small deposits allowed. Finally, read the small print to avoid inactive account charge fees.
Location of the Bank
In order to save yourself some time on traveling, you should consider opening a savings account for your teens at a bank or credit union located near where you live or near where you frequent. You could find a bank in your local grocery store, or one located near your neighborhood, or one near their school, or near their work. Apart from saving them money in gas, a convenient location will make it more likely that your teenagers will visit the bank to make deposits.
Earning Interest on Savings Accounts
If the idea of having a savings account is to put money aside for the future, for example college, then it’s best to find a savings account that can keep fair pace with the rate of inflation. There’s no point in saving money for years only to find that the money lost most of its purchasing power.
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