A savings account can help you jumpstart your child’s financial success. Opening up a new account is simple and can be done as soon as your child receives a Social Security number.
As your child grows, use their account to save gifts like birthday and holiday money for their future. In addition to being a safe place to keep their money, an account provides a learning opportunity and a way to teach children how to save and spend money responsibly.
Open a PSECU Account
So you’ve decided to open a savings account for your child. What kind of account will best fit their needs? As a parent, you have two account options to choose from at PSECU — regular and custodial.
Any child 13 and older can open a regular savings account. A parent can serve as a joint-owner of the account, but it’s not required. This allows parents to monitor their child’s money management.
For a child under 13, you must open a custodial account. This account has a custodian who is the only person who can complete transactions on the child’s behalf, though the child is the sole owner. A custodian must be 18 or older. If you plan to open a savings account at PSECU, the child will need to be eligible to join. The custodian doesn’t need to be eligible.
Think of a custodial account as a savings account with training wheels. Kids can practice, learn, and develop the skills they need for financial success later in life with the help of the account’s custodian.
For youth under 18, both regular and custodial accounts qualify for a special dividend rate at PSECU, helping them save even more. Youth Savings Accounts will earn a 1.00% Annual Percentage Yield (APY) for balances of $.01 to $500.00. For balances of $500.01 and over, the Regular Savings Share APY will apply.
By opening a savings account for your child, you can teach them how to manage and save funds properly early in life.
Teach your child the importance of a savings account and how they can use online banking or the PSECU mobile app to track how much money they have.
If your child is old enough, encourage them to look for their first job. A number of businesses hire tweens and teens, including retailers, newspapers, restaurants, amusement parks, ice cream shops, and more. Encourage your child to put a portion of each paycheck into savings.
Use Your Child’s Account to Teach Important Money and Online Security Lessons
A savings account provides a learning opportunity. Use the account to explain to your child where money comes from. Teach them that money is not unlimited and must be earned through hard work.
If your older child gets a job, they’ll learn about earning money firsthand. Younger children can also be taught about what goes in to earning a regular paycheck.
It’s not uncommon for kids to have questions about money, such as:
- Where does money come from?
- Where do you keep your money?
Be sure to educate your children about credit unions and other financial institutions. Discuss the different ways money can be kept safe. And if your child will be using online banking or a mobile banking app, you should also talk to them about online security.
Discuss the importance of using unique passwords to keep private information secure. Choices like “password” and “qwerty” won’t cut it. And don’t pick something that’s easy to guess, like a birthday. If your child wants to make a purchase online, teach them how to identify a secure, reputable website and make sure it’s legitimate.
Ready to open an account for your child? Apply today.