From steps to words, being a new parent means exploring a whole world of firsts, including baby's first savings account, with FAIRWINDS. And one of the most important of those brand-new experiences is setting up your very first savings account for kids.
But, where do you begin?
Knowing your options for kids’ savings accounts
When it comes to saving, it pays to know your options. Long-term savings accounts for children come in many shapes and forms, each with its own specific benefits or advantages.
A popular option for new parents is a 529 plan, which can either be an investment account or prepaid tuition plan. With this type of account, you have the option of either making tax-free contributions or saving up for a specific university, or group of universities, at their current rate, avoiding skyrocketing tuition fees.
Need your child’s funds somewhere a bit more accessible? A regular savings account lets you make deposits and withdrawals as necessary with little to no penalties. This might be a good idea if you’re saving for a somewhat shorter-term goal, or when it’s time to help your child learn money management skills by making their own deposits.
Opening your child’s first bank account
Once you’ve decided what kind of account, or accounts, are right for you and your new family, you’ll need you and your child’s information details (Social Security, driver’s license, etc.), as well as your first deposit (even if it’s coming in quarters, straight from the piggy bank).
Next steps and money management for families
Whether you’re starting a college fund or saving for Junior’s first car, you need a plan. How much will you set aside each month? What kind of interest rate are you getting? How soon will you reach your goals? A FAIRWINDS expert can help you answer all of these questions, and come up with a plan of action to get that savings account ready for your baby’s 18th birthday (which will be here before you know it).
Outside the branch, it’s important to teach kids about the value of money, and saving. Having an account is only half the journey—helping your children learn about money, investments and planning for the future is a lifelong lesson.