Opening a bank account for a child provides them with a sense of independence and ownership. It also serves as a valuable educational opportunity to help them learn about finances to better prepare them for the future. Whether they're a few years old or a teenager, here's how to get the most out of the process.
How to Open a Child's Bank Account
1. Review the Options
Banks offer extensive account options for a wide variety of goals. For kids, savings accounts are usually the main focus, but checking accounts are also valuable, especially for middle school and high school-aged children.
To help you choose the right option, consider reaching out to a representative prior to opening the account. They can go over the accounts they offer and the pros and cons of each, like interest rates and minimum balances, so that you can make the most educated decision for your child.
2. Teach Them to Save
Starting saving at an early age can set kids up for financial success, but it's a learned trait. As such, it's important to explain the value of saving money over spending it in easy-to-understand terms. For example, ask them about something they want, like a toy, and explain that they must save up to afford it.
From there, help them set a goal—like the cost of the toy—and create a spending and savings plan for any money they receive, such as putting 50% of their weekly allowance towards the item.
After giving them the tools, do your best to not interfere. If they don't keep up with their savings plan or spend their account on something else, avoid covering the cost of the toy yourself. This approach helps them learn financial responsibility.
3. Make It Fun
Emotion can impact a child's perception of a new responsibility and affect their approach for years to come. By making opening an account exciting, they're likely to stay eager about saving and expanding their financial education as they grow.
Before heading to the bank, take them to buy a filing envelope or binder to store their paperwork and monthly or quarterly statements. The addition of stickers and colored pens or markers can further the fun element of the process.
Open your child's first account today at First State Bank in Russellville, AR. The locally owned bank offers a wide range of financial solutions for residents of all ages across Pope County. They offer free savings accounts to kids under 18 years old and only require a $50 minimum deposit to open. Learn more about your child's banking options online, and book an appointment to open one today at (479) 498-2400.