Opening a child savings account is an excellent way to save for your child’s future. Many people begin saving for their childrens’ college education when their children are very young, and let time work in their favor. There are many great types of child savings accounts. Choose the one that is right for your child’s age and your intended goal.
The Value Of Time On Kids’ Savings
The main advantage of starting early with a children’s savings account is the value of time. Families that start saving for a young child can make small, consistent contributions to the account that grow over the years. If a parent saves just $50 a month for a one year old with an interest rate of 8%, the account will have ballooned to a whopping $25,000 by the time the child turns 18. While many parents know the value of saving for their children, some wait too late to start saving. If the same family saves for the child starting at age 12, they would have to save over $250 a month to reach the same level of savings. It’s never too early to start saving for your child’s college education and a baby savings account is one of the easiest ways to maximize your child savings.
Valuable Savings Lessons For Children
Another advantage of savings for children is the lesson that these accounts teach about financial responsibility. Allow your children to make their own deposits, save their pennies and watch their savings grow. Kids savings account are usually available at local banks and can be opened with small minimum balances. Showing your children the value of saving and investing is an excellent lesson in money management that will follow them through life. Open your own children savings accounts with your kids today and let them learn the value of savings and the power of compound interest.
Best Interest-Bearing Savings Accounts
When looking for the best children savings account, there are many companies and plans to choose from. Many brokerage firms have simplified their account choices. You can choose from an age-based plan that invests your deposits aggressively when the child is younger. These aggressive plans usually sink a majority of your funds into higher risk and higher return investments such as stocks. As the child grows older, the investments slowly become more conservative. The majority of the funds go to safer investments such as treasury bonds. When it comes to kids savings accounts, the most important thing to remember is that time is on your side.
There are many great ways to save for your child’s education. Whether you choose investment accounts that gain interest and grow slowly or choose to invest in stocks, there is really no wrong way to save for your children. Some parents have started savings accounts for children that they plan to have in the future. These parents enjoy the benefits of being able to make smaller deposits that grow over time.
Starting a children’s savings account is easy. Most banks offer low-fee accounts to parents on behalf of their children. When the child is older, parents can allow them to open their own accounts and deposit their allowances and money from summer jobs.
The moral is… start a childs savings account today and watch your money grow along with your child!