- Kids savings accounts help to teach children about how to save money & financial responsibility.
- By teaching your child the value of money now, they will be better prepared to manage their finances in the future.
- There are a few types of kids savings accounts with different purposes and goals.
Have you ever wondered about the spare change and unclaimed bills scattered around your home? Well, your child might have a treasure trove waiting to be discovered. The key to unleashing their financial potential lies in opening a kids savings account. Not only does it pave the way for responsible financial habits, but it also offers a range of benefits that can significantly impact their future. Hear from an actual credit union to fully understand the skills your child could benefit from opening a Kids Savings Account, below!
Does Your Child Need A Savings Account?
Chances are, growing up you had some kind of piggy bank. Whether it was actually shaped like a little piggy, or just a box with a lock, we all had a place to keep spare change. Opening an official savings account is a big step up and it can be a great growth opportunity for your child. It allows you to start teaching your child about the banking system and financial responsibility.. Before committing to regular contributions, it’s crucial to understand the tangible benefits that extend to both you and your family.
Top Benefits For Opening A Savings Account For Your Kid
Below we have listed out 4 reasons it’s beneficial to open a savings account for your child.
1. Learn The Value Of Money
Setting the stage for financial education at a young age is invaluable. Kids observe and emulate, so involving them in selecting an appropriate savings account and contributing to it fosters a sense of responsibility. Having their own bank account will allow them to get a sense of independence.
2. Save For Their Next Big Purchase
Encouraging children to save for their goals instills discipline and patience. Whether it’s a new gadget, a hobby, or an experience, having a dedicated savings fund teaches them the gratification of achieving their aspirations.
3. Right Of Passage For Children
Opening a savings account is a significant milestone for children, marking their introduction to financial responsibility. It empowers them to take charge of their financial journey, instilling lessons that will last a lifetime.
4. Potential Tax Benefits For Parents
Depending on the type of savings account chosen, parents may enjoy tax advantages. Some accounts offer tax-free deposits, while others allow tax deferral, providing an extra incentive for securing their child’s financial future.
Choosing the Right Kids Savings Account
Part of opening a savings account for your child is deciding which savings account is right for them. Below we have listed out some common types of savings accounts. Before opening a savings account, make sure you speak to your personal banker to ensure full transparency and understanding.
Traditional Savings Account
Widely accessible but offering minimal interest, traditional savings accounts serve as a safe option for risk-averse parents.
UGMA/UTMA Account
Congressional creations, these accounts allow controlled savings for children. They transfer ownership upon adulthood without the need for complex legal arrangements.
General Investment Account
Similar to adult investment accounts, these require financial expertise but offer greater flexibility.
529 Savings Account
Named after the tax code, 529 plans provide a state-managed option for unlimited annual contributions and tax deferral, ensuring funds are earmarked for educational pursuits such as college or trade school.
Open A Kids Savings Account At Metro Credit Union
Choosing the right kids savings account is pivotal for their success. With numerous options available, it’s essential to understand each one’s unique features. If you’re considering taking this step, Metro Credit Union offers an account tailored to help with kids finances. It is called Xenon and will help your kid understand banking & saving while giving parents some controls. Metro Credit Union offers an ideal platform for investing in your child’s future. So, when it comes to opening a savings account for your child, make the smart choice and choose Metro Credit Union for a seamless and rewarding experience! Browse our website, give us a call, or visit us today at any of our two locations in Springfield. We look forward to helping you set your child up for success!!