Teaching Kids A Little About Money
Quite a few people think that opening a bank account is the best way to introduce their children to the concept of banking and saving up on their finances. You would expect that banks would make your kids savings accounts as simple as possible; however, more of than not, it isn’t the case. Many research studies show otherwise. Here is one such conclusion about what these studies have said about savings accounts and interest rates.
The good news is that a vast majority of kids’ savings accounts offer good interest rates, some of which are close to the rates currently offered by high-interest online savings accounts. On the contrary, there are complex conditions attached to these good rates. They are usually only available if you make at least one deposit per month, and the minimum deposits can be more than what your child receives in pocket money.
In addition to this, there is another nasty trick, which is played by several major banks. The trick is that once your child reaches their savings goal and withdraws their money, they’re often hit with a huge interest rate cut. If they make a withdrawal from the kids’ savings accounts from ANZ, CBA and Westpac, for example, their interest rate for that month drops to a meagre 0.01%.
Many a times banks can act greedy, which is another lesson that kids may learn from fees charged by a range of institutions. While the majority of banks don’t explicitly charge such fees, others do not make this very clear and trick you into the loopholes they have created in the policy. So make sure you do not forget to read the fine prints in the policies offered by these banks and financial institutions, and are well acquainted with what exactly you are getting into.