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A child savings account can help teach financial education

A child savings account can help teach financial education

As the end of summer vacation gets closer, parents will begin to think about what their children will learn this school year. There likely will be a math course, a science class and some English on your child's schedule. But what about finance?

Chances are, your child isn't learning about financial literacy in school. Just 17 states require a personal finance course to graduate high school, according to Survey of the States, a biannual report from The Council for Economic Education.

Parents can take matters into their own hands. By teaching children about money management early on, they can learn practical financial lessons that will benefit them as adults. Helping your child open a bank account this fall is a smart way to start teaching about money.

Open a savings account for your child

In most cases, a savings account is best for a child. They probably don't have any bills to pay, so they don't need immediate access to their money, and savings accounts typically have higher interest rates.

It doesn't take much to open a savings account. Be sure to have your child's Social Security card handy, and encourage your child to bring some money he or she wants to deposit for the first time. The act of making a deposit into the account is a good foundation for understanding the purpose and benefit of a bank.

Financial lessons to teach your child

Once the savings account is open, there are a number of lessons you can begin teaching your child. Encourage regular deposits into the account using gifted money or cash he or she gets from doing chores at home.

Every time you do so, show what the new balance is on the account. This is an excellent way to bring math skills your child might learn in school, like addition or multiplication, and apply them to the real world. Depending on what grade your child is in, he or she may have learned about compound interest - point out how this concept is applied to your child's bank account.

Your child is likely already skilled in using smartphones and tablets. Show them how these devices, usually used by children for fun, can also be used for checking a bank account. This is also an opportunity to discuss cybersecurity.

You may want to show your child how to use an ATM as well. These machines can be used to deposit a check or cash, check an account balance or make a withdrawal.

Are you ready to open a savings account for your child this school year? Talk to The Federal Savings Bank to learn how simple this important lesson can be.