General Question

wundayatta's avatar

How should I set up a child's bank account?

Asked by wundayatta (58525points) December 22nd, 2008

When I grew up, we went to the bank and got a passbook savings account. It was a ritual going to the bank to deposit money into the account. It was also a ritual to watch the interest accrue (oh so slowly).

Now, what do I do? An ING account online? Is that ritual enough? Do passbook savings accounts even exist any more? Frankly, I haven’t set foot inside a bank in years. What’s the point of teaching my kids to do that? Do they need to stand in line in front of a teller?

I want them to learn the importance of saving, and to be financially responsible, but, as technologically savvy as I may otherwise be, somehow I feel at a loss about getting started with banks and kids these days.

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5 Answers

aanuszek1's avatar

I have a joint account with my parents at the local bank. It’s my account, just my dad’s name is on it so he has to be there if I want to make withdrawal. It works like a normal account though. I deposit some $ weekly, and I get a statement every month. I’m only allowed to deposit though :P

Darwin's avatar

You still go to the bank with your child and set up a joint account (exactly how it is titled depends on your state). You take them every Saturday so they can deposit some of their “allowance.” You show them their statement each month when it comes and explain it at their level. You allow them to take money out to buy Christmas presents or on their birthday to buy something special they have been saving for (they have to tell you in advance what it is and you have to help them understand when their savings goal has been reached).

Nothing has really changed. Your kids still need to see how banks work, even though once they are adults they may never set foot in one again. Just because a bank is online doesn’t mean it has different rules.

dalepetrie's avatar

I haven’t done it yet myself, but I had an account at Wells Fargo for about 14 years, and basically I started internet banking about 8 years ago, and rarely if ever used this account anymore, so for about 5 years, I had something like $6.32 in my bank account, just sitting there. So, one day, since I work in a building called the Wells Fargo Plaza, I decided to dig up that checkbook and go in and close the account. I did so, and considering that I wanted to get my child a passbook savings account soon much like my parents did for me when I was younger, I was intrigued to see this passbook savings program they have, and I grabbed some literature.

Now the major portion of my son’s money, which I guess I consider to be a college/first car type savings account, I set up a money market that’s tied to my bank account with my internet bank, and that way he makes interest (and I’ll admit, it comes in handy if I’m going to have a shortage, I can borrow from his account and pay him back w/ the interest the bank would have paid him). But for the few bucks he’s got lying around, I figured the passbook plan was good.

Now, to get him used to the idea of a passbook plan, what I did was to cut up some paper and make a little book. Then let’s say he had $20, I’d take the $20 and write $20 in his book and add it to whatever he had. Then when he wanted to buy a toy, if he has enough in that book, we’ll buy it and deduct it from his book. That way he gets the idea of saving and spending money. At the same time, the schools are working with denominations. This way, when it comes time to look into these passbook savings accounts, he will have a little more of an idea of what’s going on.

Anyway, I imagine if Wells Fargo offers it, other banks do too, just give one of them a call. What I found interesting though was that they give out rewards points as well, so if you make so many deposits of $5 or more in a certain period of time, you can earn enough to get, I dunno, a stuffed pig or sumphtin’.

Just call a bank when you’re ready and see who has the best offering.

Raggedy_Ann's avatar

I agree with dalepetrie, take them to the bank so they understand.

@dalepetrie, love how you explained this to your child. Great idea!

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