Children’s savings account at Bank of America

Both to help your children open their own accounts and to save on their behalf, we explain here how to find the best savings accounts for children within Bank of America.

Teaching your child to save money for the future can create good habits for life. Whether you’re already talking to your child about saving or looking for a way to start a conversation about it, a real savings account can be very helpful. You will get your child excited about the idea of ​​saving money for more difficult times.

Option 1: Youth Savings Accounts

Bank of America Youth Savings Accounts are identical to traditional savings accounts, but they are designed for the more modest needs of young savers.

These accounts usually have:

  • Lower minimum balances.
  • Cheap maintenance fees.
  • Joint Ownership. The account is in your name, as well as your child’s, because the law generally prevents minors from opening bank accounts. Both have the ability to make withdrawals or deposits.
  • Transfer of ownership. When your child reaches a certain age, you can give them full ownership of the account.

Some banks require that children have a minimum age before you can open a youth savings account. Other banks, including the Bank of America, they don’t have that age restriction.

Consider encouraging your teen to use a Bank of America Youth Savings account for some of the money they’ve been gifted, and see how much they can save and over how long. It then helps to set goals to achieve the goal. You can also use the account to explain basic money concepts, such as how interest accumulates. Be sure to explain banking fees and restrictions; for example, Federal Law limits the number of withdrawals and transfers from a savings account to six per month.

Establishing good savings habits early on can give your child the confidence to make smarter money decisions for years to come. Your child may also become more responsible when it comes to money and understand the distinction between needs and wants.

As your child gets older, you might consider adding additional features like a checking account, online banking, or a mobile banking app. Learn more about Bank of America children’s savings account options.

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Option 2: Custodial Savings Accounts for Children

You can also help build support for your child’s future by opening a custodial savings account. These accounts are governed by law – the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA). As custodian, you can deposit funds and manage the account, but the money belongs to your child, who won’t be able to withdraw it until they’re 18 or 21, depending on where they live.

You will be able to withdraw the funds before the age limit, as long as you use the money for the direct benefit of your child. For example, you can use some of the money to send your child to summer camp, pay for tutoring, or contribute to a first car. Learn more about custodial (UTMA) accounts at Bank of America.

Keep in mind that Custodial savings accounts may offer tax benefits on interest income. However, you may have to pay a gift tax if an amount contributed to the account is very large (more than $15,000 per year for 2018). Before you open this type of account, be sure to carefully review the tax and financial aid considerations for you and your child.

real life lessons

Children may find it strange to be told about money, and they may also feel confused. But putting those words into action by opening a savings account together is a great way to further your child’s financial literacy and foster good money habits.

Choosing the right savings account depends on your goals and what you have for your child. Together, you can lay a solid foundation for your financial future.

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