Opening a Savings Account for a Child
How to Get the Most Out of the First Visit to the Bank
May 31, 2009
Financial institutions can be overwhelming to children. Often, they are large places with professional looking decor that have people coming and going in a continuous stream. In order for a child to appreciate saving, the process must be enjoyable, and as such once its been determined where the account will be opened, it is very important to take the mystery and fear out of a child's first trip to the bank and to continue the lesson after returning home.
Helping Your Child Get their First Deposit Organized
The first step in preparing for a visit t to the bank is to gather the money for the opening deposit. A great place to start is with your child's piggy bank.
- Empty the bank and have the child separate coins into piles by type.
- Have the child count each pile, stacking nickels, dimes and quarters into dollars and pennies into fifty cents.
- Explain to the child how coin wrappers are used and then help them fill the wrappers. For reference, penny wrappers hold $.50, nickel wrappers $2.00, dime wrappers $5.00, and quarter wrappers $10.00.
- Ask the child to total the amount of money.
- Allow the child to calculate the difference between the amount they have gathered and the required minimum opening deposit, if any.
- Have the child count out paper currency to make up any difference.
The Importance of Scheduling Your First Trip to the Bank
It is wise to call ahead to schedule an appointment. This allows the account officer to set aside time for your visit, allowing them to be less rushed and better able to thoroughly explain things. It also cuts down on the waiting time in the lobby, which can be difficult for young children. Calling ahead also enables the account officer to greet your child by name, making them feel special and more at ease.
What to Do During Your First Trip to the Bank
- When meeting the account officer, make sure your child learns their name.
- Allow the child to provide their name, address, and phone number to the account officer.
- As the officer opens the account, explain to the child that bankers use computers to store information that helps them know whose money is whose.
- If the child is old enough to sign their name, encourage them to sign the signature card along with the adult who will be listed on the account. Explain that the card is used to verify that the right person receives money out of the account.
- Ask the account officer to review the savings book with the child, including where to write deposits, interest, and withdrawals.
- Have the child count out the money for the opening deposit and show them how to fill out the deposit slip.
- Write in their opening deposit into the savings book or have them do it.
- Take the child to the teller line.
- While waiting to be called to the teller window, explain to the child that tellers take deposits and give people money out of their accounts.
- Upon reaching the teller window, introduce the child to the teller and have them hand their deposit over.
- When finished, step out of line and show the child to keep their deposit receipts inside of their savings books.
What to Do After Opening a Child's Savings Account
A child's education in savings really begins when they get home. Teaching children to save is an ongoing process, and it is important to set expectations and continue talking about savings.
- Upon reaching homw, show the child where the savings book will be kept, explaining that it is important for it to be in a safe place.
- Tell the child when the next trip to the bank will take place. It is important to make trips to the bank to deposit money a regular event either weekly or monthly.
- Encourage the child to collect money in his or her piggy bank in preparation for the next trip.
- Prepare each deposit in the same way that the original deposit was gathered, helping children develop a routine for their bank visits.
- When the monthly statement arrives for the account, sit down with the child and their savings book.
- Show them how to compare the bank's record of deposits and balances to those in their book.
- Explain to them the purpose of interest and have them add the monthly amount into their savings book.
- Repeat this process each month, assisting the child until they can do it independently.
Next Steps for Teaching Children to Save
After the account is open and regularly used, parents can move on to other lessons with their children, including setting savings goals, understanding banking, and eventually, opening a checking account.
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