Whenever our 3-year old daughter finds a quarter or a loonie lying around the house, she takes it and puts it in her piggy bank. Some people might call this stealing, but I see it as the early signs of a good saver.
Now that her piggy bank is getting full, I like the idea of setting up individual savings accounts for our children.
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One of the best ways to teach your kids some basic money management skills is to open up a savings account for them. A children’s savings account is the perfect place to stash allowance and birthday money and to help build savings for the future.
Best Savings Accounts For Children
Most Canadian banks and credit unions offer special no-fee savings accounts for children to help get them started. These accounts are pretty similar across the board, but with a few important differences. Pay attention to the details to find the savings account that’s right for you and your children.
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Here’s a look at some of the best savings accounts for children:
|Bank||Account Name||Interest Rate||Other Benefits|
|ING||Children’s savings account||2.00%||Parent must be an ING customer, no minimum balance, no debit card|
|HSBC||Premier youth savings account||0.75%||Parent must be premier client, unlimited debit transactions|
|CIBC||Advantage for youth||0.50%||Unlimited debit transactions|
|BMO||Premium rate savings account||0.25%||30 debit transactions, Earn Air Miles|
|Scotia||Getting there savings||0.10%||Unlimited debit transactions|
|TD||Youth stepping stone||0.05%||Unlimited debit transactions|
|RBC||Leo’s young savers account||0.01%||15 debit transactions|
The ING Direct account has the highest interest rate at 2%, but this account is restricted to ING customers only. It’s interesting to note that ING’s savings account for children pays a higher interest rate than their regular high interest savings account does at 1.35%.
CIBC’s children’s savings account stands out from the rest when you consider key features like a competitive interest rate and unlimited transactions. The HSBC account is only available to children of premier clients who have personal deposits and investments over $100,000. RBC’s Leo’s youth savers account leaves something to be desired, with an absurdly low 0.01% interest rate and limited debit transactions.
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Parents will need their child’s Social Insurance Number (SIN) and one of the following documents in order to open a children’s savings account:
- Birth Certificate or;
- Passport or;
- Canadian Driver’s License or;
- Canadian Citizenship.
Savings accounts for children can be opened online with the above information in as little as 10 minutes. Alternatively, you can open the account over the phone in the same amount of time, or you can make an appointment at your local branch to open the account in person.
It’s worth noting that if your child is under 12 years of age, the account will need to be joint with a parent / guardian who is 18 years of age or older.
Kids are naturally curious and eager to learn new things. Setting up a savings account for your children is a great way to get them to understand how money works, to see the benefits of saving towards a specific goal over time, and to get them in the habit of saving money.