A bank is a financial institution that accepts money as deposits from the people or public and provides the money to the public when they demand and also provides loans to the public and take interest from them which is one of the big income sources of the financial institutions as banks. Banks play a very important role in the financial stability of the country and also the economy of the nation.
Every nation has a central banking system that controls the liquid assets to only the portion of their current liabilities. Banks mostly provide two types of accounts to the public, the saving account and the current account. A current account is the type of account provided by the bank where you can keep and withdraw the money anytime you want.
Generally, you don’t get any interest in the money you kept in that account. This type of account is mainly useful to the businessman and to the person who has to carry out the large financial transaction. and this type of account is not for saving purposes.
Another type of account provided by the bank to the public is a saving account. in this type of account, the people can deposit money in the account as many times as they want. But there is a limit in the number of times of withdrawing the money from the account. The bank or financial institutions may have set limits to it. this type of account provides the interest to the amount kept or deposit in the account. for most of the common people, the saving account is more famous than the current account.
This account is more useful to people making small deposits and withdrawing money when needed. in recent times the banks are increasing the maximum amount of money that can be withdrawn from the account. this type of account can be more useful to housewives, students, etc.
Among many types of saving accounts are provided by the banks. Saving account for the child is one of them and banks provide many savings accounts that are targeted to a certain age group or occupation such as student account, youth account, etc. and such types of accounts provide certain advantages and perks to that particular group.
So to open the account at the bank you have to provide certain documents such as a certificate of citizenship, a fully filled application form, the required minimum balance in the account, and a signature. In the case of a child, you have to provide the documents of the parents or legal guardian. The purpose of such formality is to keep the bank aware of you and your details.
What is a Saving Account?
A saving account is an interest-giving account in banks or any other financial institution. These types of accounts provide a modest amount of interest rate and also offer safety and reliability. So saving account is a great option for parking cash and available for short-term needs.
Saving accounts with all the perks or advantages such as interest rate also comes with some disadvantages and limitations, the limitations of the saving account is how often you can withdraw the amount from the bank but the banks also offer exceptional flexibility in withdrawing the amount so it can be really useful and can be used as the emergency fund.
You can use the money for short-term needs such as buying a car, going on a vacation, or buying jewelry. Or it can also use for keeping the extra cash which will give the extra cash as interest and its value will increase over time. The interest you earn will be qualified as the taxable income and you have to pay the tax in that amount. Though the amount of time of withdrawal is limited, the amount of cash that can be withdrawn is unlimited.
Saving or any other accounts are a great source of income for the bank or any other financial institutions and they earn money by lending the amounts to others as loan or investments and receive a hefty amount of money as interest and they give less interest to the customers and that’s how they earn money. For the reason to earn money you can see the saving account in every bank and financial institution.
The services of such institutions can also be exclusive. Except for bank even some investment and brokerage firm also have the saving account so that they can also get the profit by lending them money to others and earning money through interest, such firms also earns money by using the money in some lucrative investment and earning use money from them.
The rate of interest you earn from your money on a saving account is generally variable. With the exceptions of promotions from the bank which promises to give the rate that is generally higher or lower at any time. Mostly the more competitive the rate the more its rate is likely to fluctuate. Changes in the rate of federal funds also let financial institutions such as a bank to adjust their deposit rate.
How do Choose the Best Bank Open Savings Account for Your Child?
Opening the saving account for your child is one of the best ways to teach your child to do saving. After the children learn to save money the first place they would keep money would be their piggy bank. But the piggy bank gets full after some time and you need someplace to keep your child’s money and that perfect place can be the saving account for the children. Before you select the bank to open a saving account of your child you have to check the proximity of the bank to your location and carefully read the terms and conditions provided by the bank.
The location of the bank is one of the key factors while choosing the ideal bank to open the saving account for your children. If the children like the concept of saving money and opening accounts, they most likely to make frequent visits to the bank to deposit their money so it is best or ideal to choose the bank in your neighborhood where the children can make frequent visits safely.
You can also choose the bank at the common route where you make the frequent visits such as supermarket, pharmacy, etc where you can take your children’s with you and they can deposit their money in their saving account. You can also choose the same bank as yours and when you visit there you can also take your children and they can deposit their money in their account.
The other factor that you have to keep in mind while choosing the bank to open the saving account for your child is fees and requirements, you have the choose the bank which doesn’t take the monthly maintenance fee in their child saving account program.
This will help you to save a ton of money and you can keep that money in your children’s saving account which will help them a lot in their future. While choosing the bank for your children you have to keep in mind that the bank mustn’t have any minimum deposit amount in their child saving account program so that your children can save the money even if they don’t have more which will motivate them to save more money.
You also have to keep in mind that the bank doesn’t take any fees for inactive accounts and read all the conditions before opening a bank. If you are using a bank that provides a free saving account, find out what will happen if you move your accounts to another bank.
It is most likely that you will first choose the same bank as yours to open the child saving account of your child and if your bank doesn’t provide such service or you are not satisfied by the terms to open such account , you can explore the local credit union. Credit unions often have lower fees as they are member-owned.
You can also explore or look out for the online bank where you don’t have to make any physical visits and it can also come in handy at the present times where the pandemic is affecting day to day life of the common people.
You also have to keep in mind the age of your child , if your child is a baby and you want to open the saving account for them then you may only be saving gift money if your child is little bigger then your child can deposit money and take out when they want to buy new toys or join sports class.
If your child is a teenager then they may want to link their account to the checking account so that they can take out the money more often. Ask for the services provided by the bank to the children before opening the saving account, some banks provide piggy bank services to the children so that they can save coins.
Some banks let the children see the safe where their money is kept, and can also be a vital teaching and learning experience to them. Last but not least you must always ask for the interest rate of the child saving account which will help the money to grow in the meantime. As different banks have different interest rates, you may have to do a lot of market research.
The Best Bank to Open Savings Account for Child in the United States of America Are
- Capital One Kids Saving Account.
- Alliant Credit Union Kids Saving Account.
- Bank of America Minor Saving Account.
- Becu Early Savers Account.
These are the child saving accounts of the banks that provide the highest interest rates among others along with many other benefits that make them the best. Capital one kids saving account provides the interest rates of 0.30% with a $0 minimum balance which makes it one of the best child saving account, Alliant credit union kids saving account provides an interest rate of 0.55% which is very good and it also provides the $5 minimum balance in the account.
Bank of America minor saving account also gains a good position in the list of best child saving account in the country with an interest rate of 0.03% and the minimum balance of $25 which is also very good than the other banks outside the list.
The beau early savers account is one of the best saving accounts for a child as it provides the most attractive interest rate of 2.02% which is the best among others on the list and the most amazing part about this is it provides the service of $0 minimum balance which makes it one of the most attractive children saving account. Apart from this they also provide many other services in their child saving account which can be attractive. so these are the benefits of the child saving account of the best bank in the country.
Frequently Asked Questions (FAQ)
You can start saving money for your children as soon as you can as there is no ideal age to start saving the earlier the better.
Beau bank and its early saver’s account provides the best interest rates among others in their child saving account.
At last, you know about the importance of saving account for children and also the best bank in the united states for the child saving account and their advantages. So by reading above you must have had detailed knowledge about the child saving account and many of its advantages and the factors that affect it. You also have learned how to choose the best child savings account. and we hope that this article might have helped you in choosing the best child saving account for your children.