From our friends at OnPoint Community Credit Union
By Erin Ray, Branch Manager of OnPoint Community Credit Union’s NW 27th & Vaughn Branch in Northwest Portland
There are so many wonderful firsts in a child’s life. You never forget their first steps or the day they learn to ride a bike. Opening their first savings account is another important milestone, and one that helps them build a strong financial future.
Establishing that strong financial future has never been more important as current trends in money management are unsettling. According to the Federal Reserve, one in four Americans have not started saving for retirement. Two-thirds of Americans would struggle to find $1,000 to cover an emergency, according to the Associated Press. Now is a great time to start teaching our kids about saving habits and financial goal setting.
Ideas for introducing saving and finances to kids
One fun activity for young kids is to sort money by color and size. Or you can make grocery shopping more interesting by teaching them how to comparison shop. Invite them to discuss how to grocery shop on a budget. For older kids, start more complex conversations, such as when is an appropriate time to use a credit card instead of a debit card.
If you decide to pay your children an allowance, discuss the amount with them to get your kids involved with money-making and saving decisions. Consider encouraging your child to set aside half of their allowance for saving and half for spending or giving.
Ideas to start kids saving money
When it comes time to get your kids set up at a financial institution, there are several convenient ways to get the ball rolling. The 529 college savings plan is a great way to save for your children’s education, and you may receive tax benefits for contributions you make to your account.
Another option is the Certificate of Deposit, or CD, which generally offers higher interest rates than traditional savings accounts. With a CD, your child’s money will be committed for an agreed upon period of time, up to five years. You can withdraw the money early for a fee. Or, you can choose an annual withdrawal CD, which allows you to make one penalty-free CD withdrawal each year. Once you withdraw the money from a CD, your children can spend it on what they choose: education or something else!
Many people find traditional savings accounts are the best fit and opening a savings account for your child is incredibly easy. Many financial institutions offer special programs designed just for kids with high interest rates and low minimum requirements to get them started. In June, Oregon and Southwest Washington’s own OnPoint Community Credit Union launched the OnPoint Savers Account, with a 5.00% APY for the first $500*.
To get started, you need to set up a new membership for your kiddo ages 17 or younger and make a minimum deposit of $25. OnPoint will then kick in another $55 to get your child started (includes a $5 minimum balance). All told, your child’s $25 deposit will become $80 with OnPoint’s incentives. It’s super easy and it gets your kids saving money FAST. To learn more about this new program, check out: https://www.onpointcu.com/onpoint-savers/.
As parents, we work so hard to prepare our children for the future. Why not take this opportunity to teach them the importance of saving? You’ll help them learn about healthy short- and long-term savings habits while paving the way for any number of big financial “firsts” down the road.
*OnPoint Savers Account rate of 5.00% APY is subject to change. Stated APY is for balances up to $500; balances of $500.01 and higher earn posted Regular Savings Account rate. Account must be established for members age 17 or younger by parent or guardian with a minimum $25 deposit. Parent or legal guardian must be on the membership and present to open the OnPoint Savers Account. When primary member attains the age of 18, accounts will be converted to Regular Savings Account, earning that account’s published rate at that time. Fiduciary memberships, including UTTMA and Minor Settlement Accounts are not eligible for OnPoint Savers. One OnPoint Savers Account per member/TIN. One $55 bonus per tax ID for new members only. Cannot be combined with Refer a Friend bonus or other promotional offers.
The full account balance APY is calculated by combining the 5.00% APY earnings on the first $500 with the standard APY on the remaining balance above $500.
Federally insured by NCUA.
- A Great Time for Kids to Start Saving - July 1, 2020