After you have explained the value of money to your children and they begin to earn and save money at home doing chores, it is time to take that full piggy bank to a real bank and show them that by opening savings accounts for children and deposit their money, they can watch it grow so they can purchase that special item they have their eyes on.
You must choose a bank that will meet your needs, if the bank you do business with does not have a special savings account for kids, and then you should check with a local credit union.
Being member owned, most credit unions are able to offer lower fees than banks.
You can also check out an online bank if you would rather teach your children about internet banking.
This is one of the easiest methods of banking and you can keep an eye on the account from your own home.
Look out for minimum balance requirements and monthly service fees.
You should be able to find a savings account for your child that doesn't have either.
You should also make sure they do not charge fees for inactive accounts.
Reading all the small print on terms and conditions will make sure that your child's savings account is exactly what you and your children need.
The age of your kids also determine which type of account you will need.
For a baby, you'll need a deposit only type of account.
Older children will most likely want to withdraw funds occasionally.
This account will be with your child for a long time, so think about how it will be used over the years.
There are two types of bank accounts for kids you should consider.
They are passbook accounts and statement accounts.
For a passbook account, your child will be given a passbook where each transaction is recorded..
At any time money is deposited, that amount is entered into the passbook.
Statement accounts are when your child is provided with a monthly statement of all account activity.
They'll be able to see what has been deposited and withdrawn, as well an any interest that has accrued and any bank fees that have been charged.
Statements can be paper or electronic.
Once your child has a savings account of his own, you will see his interest in banking and managing money grow.
There are some kids who will want to save every penny they can and not spend any.
Others will take a more middle of the road approach, saving up for something they really want, and then spending it.
And some will deposit and withdraw like a revolving door.
However your child handles their savings account, they will learn a lot about how to manage the money they have.
Opening a savings account for children can give them a sense of responsibility.
Make sure to get them involved and not just manage it for them.
They will love to look over their bankbook and watch how the numbers change.
It's also a good way to save money for the things that they can't buy with just one week's allowance or money from their birthday.
Starting while they're young will help kids develop financial responsibility.
And that's worth any price.