Top 5 Reasons to Open A Baby Savings Account When The Child is Born

Many new parents are not aware that they can open a baby savings account as soon as the child is born. As long as the child has two pieces of ID such as a Social Insurance Number (Social Security Number in the States) and a Birth Certificate.

1. Keep organized

The account can serve well when putting money away that is specifically set aside for the child. It’s a great way to separate gifted money from grandparents or siblings, social security payments/ benefits, birthday presents, and college tuition / RESP savings.

2. Teach Economics 101 Early

After the little ones have mastered the piggy bank you can simply introduce the bank account and teach them the ABCs of saving-moneybanking. With the current state of ever rising real estate values and soaring tuition fees, getting a taste of money knowledge is not such a bad idea. Even teaching the kid to put away $5 of the $20 monthly allowance teaches a great lesson – don’t spend everything you have.

3. Prepare them for the Future

Teaching your kids about money early on also teaches them to think ahead, and preserve what they have.

“Education is teaching our children to desire the right things.” – Plato

Exposure to money management from early on won’t guarantee they’ll be the next CFOs of Google but will sure teach them to set aside for a rainy day and save for something they’ve always wanted!

4. Take advantage of Free Banking

Why keep the children’s money at home or mix it with your own banking when you can deposit it into a free account and have it safely tucked away. On top of that it can accumulate interest if you invest it into a risk-free investment such as a Guaranteed Investment Certificate (GICs), bonds, or the money market mutual fund.

5. Out of Sight Out of Mind

kids-beach-toys-1554289-1279x1705As a parent, you are less likely to spend the children’s gifted money if it is separate from all your banking. If the money is deposited into a separate account and requires a little extra effort to withdraw, such as visiting the branch, then you are less likely to do it. It’s easy to withdraw $20 here and there for living expenses if the money is within arm’s reach, but you’ll be glad you didn’t when it’s time to cash out for that new bike they wanted, or the new Xbox that everyone at school has etc etc etc.

>>FAQ What is a Savings Account?

A savings account is a bank account, which usually has limited transactions, no monthly fees, an interest rate and allows unlimited deposits for saving purposes.

The Best Kids Savings Account:

  • Free until the age of 18
  • Unlimited transactions and no minimum balance
  • Online access
  • The parent and the child can both have access
  • The child can choose to have sole access after the age of 12 (varies by state or province)

 

Category: BloggingDay to Day BankingSavings

19 comments

  1. Teaching your kids about money early on is a MUST! Opening a savings account for your children is a great way to start building them a safely net for the future <3

  2. Teaching kids to save at an early age is key for a lifelong habit. My kids opened their savings accounts around 8 or 9 years old and now they are ready for teen checking accounts.

  3. I opened accounts for my boys and put all the money they get at their birthdays and Christmas in there. It adds up quick.

  4. We are opening account for our son, and he is 15 months. I already feel behind! With the cost of college and potentially more schooling, I don’t want him to enter the workforce heaped in student loan debt like I did. It is so important to start early.

  5. You definitely can’t begin saving too early! Whether the kids need to have money for education, travel, a car, or even just a nest egg to pass on to them once they finish school it is such a wonderful thing to be able to help them get started on the road to independence.

  6. These are indeed great reasons to start your child’s saving account when they are born. It is so important to parents to start the college fund as early as possible. It is a great idea to teach them how to save when they are young.

  7. What a great post. Starting early is very important, and not something we think about when having little ones. It’s a great way to prepare them for their future.

  8. That last one hits home for me – “out of sight, out of mind.” I start every year off putting $5k in my daughter’s savings account and it’s done and I forget the money is even there. It’s not staring at me from the bank account, waiting to be spent, or dwelling on a to-do list. Done and done.

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Article by: Anna Suzdenkova

Employed in the financial sector for over 7 years. Held various roles including financial advisor, auto claims adjuster and manager of customer service. Attained an accounting degree with Honours. Mutual fund licensed. Passionate about helping people. Forever an optimist, positivity is the key to a happy life. Enjoys helping people decipher the banking world and use it to their advantage!