Hooray! It’s America Saves Week 2012 - February 19 through 26! (Cue confetti, balloons & noise makers!) O.K, so maybe that’s too much. It’s not THAT exciting. But, it is a great annual reminder to take a look at your savings plan and re-evaluate it. Young America: it’s a great time to educate yourself on how saving money really works! You can check out the earlier Bank Roll blog posts that discuss budgeting and interest rates. But what saving options are available to you? Let’s take a look.
Types of Savings Accounts
Most banks and credit unions offer two types of basic saving accounts; Passbook Savings and Statement Savings.
- With Passbook Savings, you receive a physical book that you need to have with you anytime you deposit or withdraw money from the account. However, electronic deposits to the account are allowed--- like having your pay check, or a portion of your pay check, go directly into the savings account. You can’t use an ATM card with this kind of account.
- Statement Savings has no book. You keep your own records, called a register. You receive a periodic statement of all the activity on the account electronically or by mail. This type of account does allow ATM cards.
Title on the Account
This is the name or names authorized to use the account. For children, generally an account is opened by a parent in the child's name. This is called a Custodial Account. The parent is the custodian for their minor (not an adult yet) child until the child becomes a legal adult. Only that parent is allowed to do transactions on that account. So, if your name is not on that account, you must have your parent or guardian, or the person who's name is on the account to be with you if you want to take out any money. For teens, many banks will allow you to have a savings account in your name and allow you to deposit and/or withdraw money yourself, provided an adult (18 or older) is also named on the account with you. You also may be allowed to have an ATM card. Check with your family’s bank or credit union regarding the institution’s policy.
Cost of Saving Accounts
To encourage saving, many financial institutions (that’s banks and credit unions) do not charge minors a monthly service fee on their account until they reach the age of 18 or 21. At that time they may require you to keep a certain amount of money in your account to avoid being charged a service fee. As long as you never go below that amount the account won’t cost you anything. Check out America Saves Week for more information, or try our Savings Piggy to figure out how much money you will need to save in order to reach your goal. Let us know any questions you have about savings accounts or banking in general in the comments below.