When you sit down with your child or teen to compare youth savings accounts, it’s important to check several key factors that will determine your savings growth. These include:
Interest rate
The better your interest rate, the better the return you’ll receive on your savings will be. Comparing and finding an account with a competitive interest rate with Savvy can allow you to get the most out of your savings account. For example, if you invested $100 a week at a rate of 0.5% p.a., you’d earn $326 interest after five years. However, if you invested at a rate of 2% p.a., you’d earn $1,339 over the same period. It’s important to watch out for short-term introductory rates which revert to a much-lower standard rate. You can use Savvy’s simple online savings calculator to simulate how your savings can grow.
Bonus rates
You’ll be rewarded with bonus high interest if you and your child meet the account requirements. This can be a good way of encouraging early savings habits in your child. These monthly conditions often include depositing a certain amount, which can be as little as $1 to $5, and not making any withdrawals. When comparing your options with Savvy, look at both the base and maximum interest rates. If you and your child can’t meet the requirements, your interest will be calculated on its base rate.
Access to money
It's all in the name. Savings accounts are meant for savings. However, depending on the institution you choose, you may be allowed to make a certain number of free transactions without it impacting your interest or resulting in costly fees.
Fees
Opening a savings account account can come with a raft of monthly fees, including those for account keeping, paper statements and over-the-counter transactions, none of which are likely to cost more than $5 each. While most youth saver accounts don’t come with hidden costs, it’s important to compare your options with Savvy to ensure you’re not paying extra out-of-pocket costs.
Ability to contribute
Adding to your online savings account is easy thanks to the evolution of banking. All financial institutions offer online banking systems to make shifting money seamless. When you’re comparing accounts, make sure to double-check the youth savings account you’re opening is accessible online. This will make it easier to set up automatic deposits. For instance, having online banking functions can make it easier when transferring your child their pocket money. If you need some guidance on how much to put away to reach your target, you can use Savvy’s handy online deposit calculator.
Parental controls
A parental control feature allows you to dictate how much control your child has over their savings. Some of these features offered by banks include allowing your child to check their balance but not withdraw. If your child is under 12, parental controls are mandatory.
Account requirements
Youth savings accounts can come with several conditions or requirements, such as minimum deposits or balances. These can include keeping your balance above zero or having a higher balance month-on-month. By comparing with Savvy, you’ll be able to find a set of requirements you and your child can easily manage.
