What Age Is Good for a Child to Open Up a Savings Account?

How Soon Is Too Soon?

It's never too soon to open a savings account for your child or grandchild. Some parents and grandparents even opt to start an account before the child is born. Waiting until the birth however, has its advantages. For instance, the child will have a name and social security number for identification purposes. Make sure to ask if the account is "fee free" prior to opening it. It's also never too late to open a savings account. Teaching children to save their money and to plan for the future is a valuable lesson and one that can be started at any age, though most banks will suggest starting a savings account as soon as possible.

Once the account is started, keep the savings process continuous. Encourage your child to place a portion of monetary birthday and holiday gifts into the savings account. Add to the account when you are able and encourage grandparents and relatives to do the same. Sit down with your child and go over monthly bank statements and show him how deposits and interest add up over time. Praise your child for saving her money.

Keep communication lines open in regard to money and financial planning. Talk about savings goals in age appropriate ways the child can understand. If the child wants a large-ticket item, show him how long it will take to save for that item based on current deposits. Talk about financial planning for the family's future and set a positive example for the child to follow.

Having a savings account can teach even very young children some money-management skills. Savings accounts provide opportunities to learn about keeping money safe, making deposits and withdrawls, interest rates and planning for the financial future. Children learn to set financial goals that can benefit them into adulthood. Learning to be responsible with money is in invaluable lesson that should begin as soon as possible. Some banks even offer special money-skills workshops for kids, making saving money fun and understandable. Ask your bank what types of children's services it offers.