Important Questions & Answers to Consider When Opening a Youth Savings Account

One of those is parents wanting their child(ren) flourish. And there is a simple way to help set them up for financial success on the way to doing so.

Teaching and encouraging good money habits at a young age starts by opening a youth savings account.

Opening an account gives your child a glimpse into how banks and credit unions work, plus the opportunity to stash their allowance and birthday money.

What is a Youth Savings Account?

A youth bank account teaches children proper money management from a young age. The account gives access — in-person and online, to parents or guardians, and the child.

This allows the child to watch their savings change and grow over time, while also allowing them to access the money if necessary.

A piggy bank can do the job when a child is young, but it isn’t the safest option. They can become lost during a move, stolen, or destroyed.

So, even though piggy banks can tie together a room, it’s not the best option to help your child save money.

Is My Child Old Enough for a Savings Account?

Typically, youth bank accounts give parents or guardians joint ownership. Because of this, there isn’t usually an age requirement.

This will allow your child to earn an annual percentage yield (APY) on their savings.

The annual percentage yield is the rate of return earned on a savings deposit, taking into account the influence of compounding interest.

Unlike simple interest, compounding interest is calculated periodically and added to the account’s balance.

So, if you’re wondering if now is the time to open an account for your child, the simple answer is yes.

Does the Account Offer Online & In-Person Access?

The online habits your child creates are important, especially financial habits.

Online access, paired with a user-friendly website and app, can make a big difference for busy families on the go.

Monitoring the account balance, checking monthly statements, and monitoring transactions are habits that they will carry into their adult years, when they have bills to pay.

But walking into a branch office is a great way for your child(ren) to become familiar with the transaction process.

The face-to-face experience can help your child build confidence with transactions, and even money counting skills. With the help of a staff member, withdrawing birthday money can turn into a learning experience.

Having a branch located in your community can be just as important, if not more so, as a user-friendly website.

Banking where your child lives or goes to school can make withdrawing or depositing money much easier than an online-only bank, or a bank that isn’t as conveniently located.

Is a Youth Bank Account the Best Option?

Before opening an account, take some time to research the different options available.

Hudson River Community Credit Union offers a variety of savings accounts, each serving a specific purpose.

And if you aren’t sure which is best, our financial experts will be happy to walk you through the decision process.

UTMA Savings Account

A custodial account established under the Uniform Transfers to Minors or Gifts to Minors Act (UTMA) is ideal for parents or guardians who plan on gifting money to a minor.

Account holders are given free access to online and mobile banking, free audio response, and free eStatements.

Youth Savings Account

Ideal for minors, youth savings accounts allow kids to start saving for their future with a minimum balance of $5.

Account holders are given a Visa debit card, free ATM transactions within the United States, free access to online and mobile banking, free audio response, and free eStatements.

Prime & Universal Savings

Young adults, ages 15 and older, with a minimum balance of $5 will find the prime savings and universal savings account options to be best suited to their needs.

Account holders are given a Visa debit card, free ATM transactions within the United States, free access to online and mobile banking, free audio response, and free eStatements.

Lifelong Lessons

Encouraging positive money management skills, including saving more than is spent, is a valuable life lesson. And something your kids are never too young to learn.

Contact our money management experts today to discover the different ways we can help your child save for the future.