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Kids savings accounts helping make Australian kids $70 million dollars richer

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Global Money Week marks a time to take an interest in improving our kids’ financial literacy and wellbeing

Sydney, 27 March 2017: With Global Money Week kicking off this week, one of Australia’s leading credit unions, Gateway Credit Union, is urging all parents to consider opening a kids saving account for their children in a bid to help foster better financial literacy in our youth.

The international initiative – with the theme, “Learn. Save. Earn.” – aims to help children and teenagers start the journey to a better chance at financial security.

According to Gateway CEO, Paul Thomas, kids’ savings accounts are a great way to develop engagement and set good money habits from a young age, while also putting kids in a better financial position.

In fact, if all 4.4 million kids under the age of 15 in Australiaopened a kids’ savings account, with an original deposit of $1000, ongoing deposits of $20 per month, and with an interest rate of 1.5 per cent, over the course of a year that amounts to more than $70 million of interest earned collectively.

“It’s never too early to start teaching your kids about good financial management – especially because it’s a skill that can make a substantial difference to their lives. The benefits of opening a savings account for your kids go beyond just a good interest rate. They provide a practical way to introduce important financial concepts like compound interest and a hands-on approach for instilling the right habits and attitudes when it comes to money. And as they say, the habits we forge as youngsters are often the ones we carry into adulthood,” said Mr Thomas.

“This year’s Global Money Week theme is ‘Learn. Save. Earn.’ and a savings account for children will offer precisely that.”

Mr Thomas went on to warn that not all kids’ savings accounts were created equal. For parents or family members considering opening a savings account or that want to review their current account, Mr Thomas advised conducting the proper research before deciding on a product.

“While there might be several savings accounts aimed at kids in the market, it’s important not to simply choose a product based on the interest rate alone. Many accounts have associated fees, penalties for withdrawals and conditions on bonus rates that can all eat into their savings.

“A quality account will offer a competitive rate, no account keeping fees, unlimited fee-free transactions, unlimited deposits, and no minimum balance. In addition, it also helps if there is an element of fun associated with the account. For instance, our award winning Dollaroo Kids Account2 provides a quarterly newsletter for kids aged between 0 and 12 with educational facts and activities – such as a colouring competition with a prize of $50 for the winning entry,” concluded Mr Thomas.

END

1 As at June 2014, based on the latest figures from Australian Bureau of Statistics: http://www.abs.gov.au/ausstats/abs@.nsf/Previousproducts/3235.0Main%20Features102014?opendocument&tabname=Summary&prodno=3235.0&issue=2014&num=&view

2 Dollaroo Kids Account was recently awarded an Experts Choice Award by independent financial comparison website, Mozo