Short answer: Yes. And the sooner, the better!
There are multiple reasons to open a savings account for your child, even if they aren’t old enough to understand anything about banking and the financial world. Let’s discuss a few of the benefits!
By and large, one of the more popular reasons that parents open savings accounts for their young children is college. According to the latest data, the average cost of tuition and fees for a public, 4 year, in-state college is $19,548. And if tuition increases keep up trends over the last decade (6.5% increase per year), that price will be almost double by 2030.
So for new parents or parents with young children, opening an account now can help you prepare for those high tuition costs while minimizing the chances of student loan debt.
For parents of children who are a bit older and able to earn some form of income, whether it’s from an allowance or a part time job, a savings account can be a great way to teach financial responsibility and stability. Children can begin to understand the value of regular deposits, interest rates, and money management.
Should your child acquire a full ride scholarship, choose not to attend college, or pursue a less costly two year degree, a savings account can provide them with a stable nest egg that can be used for down payment on a car or home, moving expenses, rent, or to start an investment portfolio.
Bottom line, by setting up a savings account now, you can provide your child with a base line of financial stability when they enter the adult world.
If you’d like more information on NobleBank’s Kids Saving options, just give us a call at (256) 741-1800.