Set Up a Savings Account for a Baby
If you have any money left over at the end of the month you will want to ensure that you have the best savings account to keep the money safe for future use. It is also important to ensure that your kids learn from an early age the value of money and the importance of saving. We look at some of the best banks for saving your hard-earned cash. In addition we examine ways to plan for those big occasions such as Christmas and ways to encourage your kids and teens to put a savings plan in place.
Choosing the Best Bank for Your Savings Account
There are so many options for savings accounts being offered by so many institutions that it is easy to get overwhelmed with the choices. So where do you start? A key factor to choosing the best bank for you is to determine what you want out of your bank. Do you want a high interest account? Are you looking for flexibility in accessing your money so you can use it at important times of the year such as vacation or the holiday season? Do you want great customer service? Or do you want full online access to your money? Determining your own priorities will guide you to choosing the most suitable bank for you.
Some of the options to look at include credit card companies such as American Express and Discover, auto finance companies such as Ally, international banks such as Barclays, large financial institutions such as Synchrony and CIT or insurance companies such as USAA or Farmers Insurance to name but a few.
A key factor for anyone choosing a savings account will be the level of interest they can earn while the money is sitting in the account. While generally interest rates for savings are low, if you can find a bank offering a good annual percentage yield (APY) this will ensure you are getting the best out of your savings account. One of the ways to maximize your APY is to open an online savings account.
Online Savings Accounts
Online savings accounts are a popular option. Not only do they offer the convenience of being able to view and access your accounts 24 hours a day, seven days a week, they also offer some of the best rates on the market today with minimal deposit amounts and ATM services.
Some of the best include Marcus by Goldman Sachs, Alliant credit union, American Express, Capital One and Barclays all with APY between about 1-1.5% and many offering enticing offers such as zero transaction fees and no minimum deposits.
Saving for the Holiday Season
Christmas and the holiday season can wreak havoc on your finances if you don't adequately plan for it. Having a Christmas savings plan in place can ease any financial worries of extra cost that result from that time of year.
Historically, Christmas savings accounts, often referred to as Christmas clubs, were a fashionable way of ensuring enough funds were available come December, however they have declined in popularity somewhat given the availability of online savings accounts.
That said, credit unions still offer this type of seasonal savings where a nominal amount is deposited specifically for Christmas and the account is inaccessible usually until November.
From a practical point of view, it may make more sense to open an additional high yield online savings account specifically designated for the holiday season or any other specific single item or event, for example going on vacation.
Encouraging Your Children to Save With Their Own Savings Account
It is never too early to teach your children the value of money and the importance of saving. Many financial institutions offer savings accounts for kids. A parent will have to co-sign on the account, but it is a wonderful way to let your kids see their money grow and learn good savings habits for the future.
Capital One offer a great kids savings account with online options. Bank of America have their minor savings account offering too, though APY is lower. Credit unions can also be a great option for the kids and teens of the family.
In Conclusion
It is important to do your research to find a bank that meets your needs for your savings. There are some great high yield options on the market, especially if you are willing to look at an online savings account. Finally, encouraging the next generation to develop good savings habits with their own savings account is key to future financial independence.
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Set Up a Savings Account for a Baby
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