Savings Accounts for Kids and Simple Savings Plans
Teaching your children about saving money is the best thing you can do from them but above all, they will learn from watching what you do. So remember, instilling good money saving habits in your children is never as case of “do as I say, not as I do”.
Start a bank account for your children so that they can save their pocket and birthday money, and watch it accumulate and earn interest as well as learn about banking. For the larger sums of money to fund their tertiary education, consider investing the money in fixed term deposits to earn more interest, but this will have to be done in your name.
Please note, interest rates change very often, so the below rates will likely be out of date by the time you read this. For more information, contact the banks own website directly and review their terms and conditions.
Bank West
Has the best savings account for children under 15 which is fee-free and earns credit interest. Also sign up for their bonus saver to earn more interest.
MECU MySaver
Comes in second and earns a maximum of 6.15 percent on deposits followed by NAB’s smart junior saver account that earns a maximum of 5.5 percent.
Getting the Simple Savings plan started
To get the kids started in saving, start giving them a weekly allowance. It doesn’t have to be much but you should keep the amount consistent. Encourage them to save one third of the money, use one third for their ‘bills’ such as school lunches and stationary and the other third for their entertainment, such as going out with friends to the movies and buying books and CDs. As much as you should teach your children how to save, you should also teach them how to spend.
Plan to save
To boost their savings, make regular contributions yourself. Simply adding $500 a year at 6 percent interest will earn your child almost $7000 over 10 years. The only thing you need to sacrifice: three cups of coffee a week.
Bring the kids to the bank regularly and allow them to deposit their savings into their savings accounts themselves. This will not only give them a sense of ownership over the money they’re saving, but also teach them about responsibility and they’ll walk out with a sense of pride with their updated passbooks.
When it comes to spending the money they’ve saved for something they really, really want — make sure they’ve got enough money for it and no matter how much they whine about not having enough for the item and begging you to top up the rest of the amount, don’t give in!
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