Keep Your Child’s Money Safe – And Growing – With A Savings Account
Once your child’s savings outgrow a piggy bank, the next thing you’ll want to do is find a way to keep that money safe, accessible – and growing.
Three great ways to do that are regular savings accounts, money market deposit accounts, and certificates of deposit - or CDs - at your federally insured financial institution. Each of these accounts offers you a way to save money, and earn interest to help that money grow over time - and, at your insured institution, that money and any accrued interest are protected for up to $250,000.
A regular savings account lets you safely store money and earn interest at a fixed rate, but you can only make a limited number of transfers or withdrawals each month without being charged a fee.
Money market deposit accounts are somewhat like a basic savings account, and while they may require a higher balance, they also tend to pay higher interest rates than a regular savings account.
CDs tend to earn the most interest. However, to get those higher rates, you commit to leaving that money untouched over a period of time, usually a few months to several years. Any early withdrawal could result in a financial penalty.
Before opening an account for your child’s money, be sure to ask about any minimum balances or withdrawal limits that could result in fees.
These interest-earning accounts are an excellent way for kids to learn about saving money and watching it grow, and we’ll be glad to help you get one opened.