Student Savings Account

There was a time in the United States when every elementary aged student was given an opportunity through the school to open a student savings account. The child would bring in some small change each week to be deposited into the savings account. The money would start a little nest egg for the child. When the child left the school or graduated on to a new school the savings account went with them. They were given a passbook where they could see the interest that was paid on their pennies.

This was a great opportunity for the child to learn the importance of saving. This practice has long ago faded away but that does not mean that a student savings account is not available it simply means it has to be instituted by the student or the parent.

Some Differences

One of the major differences between a student savings account and a regular or traditional savings account is that the student account usually does not require a minimum deposit nor does it require a minimum balance to keep the account from growing.

Interest is paid on the account in most cases regardless what the balance is. This is done to encourage the student to save money. Of course the bank also benefits from the deposits or the bank would not offer such a great opportunity.

Opening a regular savings account may take a deposit of five hundred or so dollars. A student savings account does not require a minimum deposit. You can usually open this type of account with as little as twenty dollars. This is a great benefit for any student that would like to have a savings account but who may find it difficult to amass five hundred dollars.

Some banks will offer higher interest than others so shopping around is a good idea. The higher the interest rate the better the return in the long run.

Restrictions

Obviously one of the primary restrictions is that you have to be a student, in some cases you have the definition even includes the age that is acceptable of the student, it is usually a very liberal range but it maybe a bit harder for a sixty year old student to get one of these accounts, although not impossible.

There may be a restriction that is imposed on the number of transactions that can be made each month. The number of with drawls also might be restricted as well. There may be some fees that are involved if you exceed the number of transactions on the account.

Understanding the limitations and following the rules that govern the account will insure easy transactions and avoid any costly fees. Many of these types of accounts require a parent’s signature and may limit the amount that can be put in the account; this is done to avoid some unsavory practices like parents stashing money in juniors account to hide it from the IRS.

A student savings account is a great way to develop good money management habits.

Student Savings Account Offers  

It is never too early to start saving. Student savings account offers can be the just the ticket you need to get started. These offers usually are quite generous and use several different promotional techniques to get you to sign on for an account.  

Benefits 

Student savings account offers usually are geared toward parents, or to young adolescents. A student savings account can be a great way to save some money for the future for a child. The money will tally up rather quickly. For example if you have a child that is five years old and you start putting only $10 a week in their bank account by the time they reach the age of 18 they will have almost $10,000 in principal plus whatever interest you signed on for.  

That money can go toward college or toward a new car or it can just be a little nest egg that they can take over and watch grow far into adult hood. There are other benefits beside the financial benefits that you child will receive by opening an account for them. They can watch their money grow and learn good solid financial habits.  

Student savings account offers that are geared toward the young adult in high school or in college are the perfect way for that young adult to get in the habit of saving for a rainy day or better yet to learn to save to reach financial goals instead of using credit to purchase wanted items.  Most institutions will require that a parent sign on the account if the student is under 18 when they open the account.  

Many times these types of accounts are very liberal in their regulations and requirements. It is typically not necessary to have any specific deposit amount unlike conventional savings accounts where you have to deposit sometimes as much as $1000 to open them; student savings accounts can be opened with as little as $5 of course this largely depends on the student savings account offers that you sign on for.  

Typically the interest rate that is offered is right around market rate at the time, some student savings account offers will offer a higher rate for a short introductory period, and than will typically revert to the more market normal rate after a specified period of time. In this situation there is nothing really to lose by taking advantage of the introductory offer rate you actually gain a little extra interest so why not go for the highest offer.  Be ware though you do not want to sign on for an introductory rate that is exceptional for a short period of time but then suddenly plummets to a rate that is lower than the normal market rate.  

Student savings account offers are a great way to compare and see what is available; using the internet to compare these products is an easy and efficient way to insure that you are getting the best deal.