What to look for in a youth bank account.
Selecting the right bank account for your kids can be a tricky process. There are loads of options available, but it’s important to make the right choice. After all, this will likely be your child’s first experience with managing their own money, so you want to set a good tone for future financial success.
When considering the best youth bank account, there are a few key areas to focus on in order to ensure the account isn’t just financially appropriate, but also secure and easy to use.
1. Low fees.
As a child, every cent counts, which is why it’s important to find a bank account without any unnecessary fees or associated costs that will have your kids wondering where on earth their money has gone. While lots of adult bank accounts involve some form of fees, the lower maintenance needs associated with youth accounts mean that there are plenty of fee-free options available.
The most important cost to avoid with a youth bank account is any form of monthly account-keeping fee. This is particularly important if the account will be used mainly for savings, without any regular deposits beyond the occasional bit of pocket money or birthday deposit. By finding a fee-free option, your kids will be able to see their balance grow over time, teaching them the value of saving as well as how interest works on a practical level.
2. Competitive interest rates.
You’ll also want your child’s bank account to help them grow their savings, rather than simply act as a place to keep money. This is where competitive interest rates come into play, particularly if you’ve opened an account for your child at a young age, meaning they’ll have plenty of time to grow their overall balance through interest alone.
In addition to providing a financial boost, finding a competitive interest rate is a fantastic way to illustrate to your kids just how interest works, and how valuable it can be when saving money. While this is possible with any interest rate, it’s far more likely that your children will take on board the value of interest if they can see it making a significant difference to their overall balance.
Of course, the best account for your kids may change over time. For example, once they become students, there are a range of different options available in order to better suit their needs. not too early to start thinking about these changes, so when exploring youth account options, make sure to consider what sort of accounts will be available through your bank in the future.
While security is a critical component of finances at any age, it’s particularly valuable for kids, who may be more likely to misplace their debit card or forget how to log into their accounts. Accordingly, a youth bank account should be secure and easy to access – preferably via a mobile banking app. These apps utilise the built-in technology of smartphones (such as fingerprint recognition) to make access to bank details far more secure than when using a password, as well as limiting the need to remember passwords.
Similarly, if you want your children to be able to access their money easily, look for an account that comes with an associated debit card. This will allow kids to spend their money in a greater variety of locations than with a simple EFTPOS card – for example, online – while still having the ability to keep track of overall balances via their banking app.
To find out more about youth accounts, as well as how the right account can help your kids learn about finance, get in touch with Beyond Bank today.