Financially savvy grown-ups know how important it is to practice smart savings and spending strategies, and they probably learned those skills as a kid. The habits kids develop early on can affect their wallets for decades into the future.
One of the best ways to prepare kids for the financial realities of life is to help them open and maintain a savings account. To help your child make the most of their money, you’ll need to choose the right account — one that offers a good rate on savings without monthly fees that eat away at accumulated balances.
At PSECU, we’re excited to offer youth savings accounts that help your child maximize their savings and set them on the right track for a bright financial future. We also provide tools and resources to teach children about finances, another way we support the next generation.
1. You’ll Have the Opportunity to Teach Smart Habits Early On
A savings account teaches children things that will serve them well for years to come.
- You can explain to your child how to read a monthly account statement.
- You can use monthly account statements to show your child how to balance the amount of money they deposit vs. the amount they withdraw from the account. Explain why the deposits need to outweigh the withdrawals to avoid overdrafts.
- You can show them how savings can grow through accrued monthly dividends.
2. You Can Oversee Their Account as They Learn
PSECU offers two account options for children under age 18 that can help them manage their money. For both options, until they turn 18, young members qualify for our special 1.00% Annual Percentage Yield (APY) on savings account balances of up to $500. If their balance goes above $500, the remainder of the balance above $500 will earn dividends based on our Regular share rate.
- Our general membership account is available to youth ages 13 and over. The child can receive a debit card in their own name, access our convenient digital banking tools, and keep the same account throughout youth and adulthood. If a parent/guardian would like account access, they can be added as a joint owner to help monitor activity. A joint owner isn’t required and does not need to be a PSECU member, but the teen must be eligible for membership.
- Our custodial account is available to youth under age 21, though the higher-yield savings rate expires once the child turns 18. For a custodial account, the custodian is the only one who can conduct transactions on the account, and the funds must be used for the benefit of the child. The youth member must meet PSECU membership requirements, but their adult custodian doesn’t need to.
Whether as a custodian or a joint owner, a parent/guardian can have full access to the account.
3. They Can Earn Dividends at a Higher Interest Rate
One of the many benefits of banking with us is that our youth accounts provide a special higher-yield savings rate that helps them build savings faster. How much is a higher yield? That’s 1.00% Annual Percentage Yield (APY) on up to $500. Compare that to most other financial institutions, and you’ll find that your child or teen can save more, faster.
4. They Won’t Pay Maintenance Fees for Saving Their Money
Unlike other financial institutions, we have low minimum balance requirements when your child opens a new account. We don’t charge monthly maintenance fees, either. As long as your child or teen maintains a $5 minimum balance, we’ll keep the account open, free of charge. You may have seen in your own experience how expensive banking fees can be over time. We want to nurture their savings instead of chipping away at them.
5. You Can Maintain Oversight
For accounts opened for, or owned by, youth under age 18, you can have full access or be a joint owner on the account. This allows you to monitor activity such as withdrawals and online transactions and creates opportunities to teach smart savings and spending strategies.
6. They’ll Get Access to Great Loan Rates and Other Banking Products as They Grow
One of the most significant benefits of banking with a credit union is the access members have to great banking products. You already know that savings accounts at credit unions often offer higher yields than other banking options. But your child may also get access to great rates on auto loans, home loans, personal loans, and credit cards as they grow older and are ready to progress to new financial milestones.
From saving and paying for college to applying for a first credit card, auto loan, or mortgage, a banking relationship with PSECU can take your kids — and you — through every stage of life.
Contact Us for More Information
If you’re interested in opening an account for your child or you want more information about the banking options we offer for older kids, get in touch with us today.
For more money management and savings tips, visit our WalletWorks page.