Catering to kids is often seen as a vestige of old-fashioned banking — a quaint throwback to less competitive times when financial institutions could afford to subsidize family-friendly accounts in exchange for the goodwill generated. Holding on to a checking or savings relationship for 20 or 30 years until little Johnny grows up to finally reach financial maturity is unlikely, since Millennials are already more apt than any generation to switch banking providers. That trend will surely continue, if not accelerate. But with a few modifications, your young saver program can be turned into a powerful and profitable acquisition tool. An upgrade was overdue and sorely needed. As a broad goal, the bank wanted a program that was more relevant to a contemporary urban lifestyle — specifically Millennial families.
What to know about savings accounts for kids
Explore the Best Savings Accounts for Kids
Teaching your child how to save money for the future can set her up with good habits for life. It can get your child excited about putting money away for a rainy day and instill some valuable financial lessons. Here are two common account types to consider:. Youth savings accounts are like savings accounts, but they are designed for the more modest needs of young savers. Some banks may require children to reach a certain age before they can open a youth savings account. Other banks, including Bank of America, have no such age restriction. Consider encouraging your child to use a youth savings account for a portion of any monetary gifts and discuss how much allowance to save.
Here’s why you should open a savings account for your kids
Consider this if you want the highest possible interest rate for building your child's savings. While it's not specifically designed for kids, the CIT Bank offers one of the highest interest rates we've found. The account earns 2. Investing your money offers stronger potential returns, but the CIT Savings Builder represents the best option among risk-free deposit accounts. CIT Bank does fall behind other banks when it comes to the digital experience.
By Martin Lewis. Is it fair to take your children's savings to spend on yourself? With Christmas approaching, many parents' and grandparents' thoughts turn to cash for kids, but not always in the way you'd expect.