A baby savings account is a great way to start saving for your newest family member without totally breaking the bank. Before you open a baby savings account, you need to ask some questions to ensure you're working with the right financial institution and the right account to accomplish the goals you want to plan for your baby's future.
1. What Kind of Baby Savings Accounts Do You Offer?
When checking with banks, ask about the baby savings accounts specifically. Some may not offer them and only offer kids savings account. If you want a baby geared account, you'll know right away to look somewhere else.
2. How Do Baby Savings Accounts Differ from Other Accounts?
You need to know how a baby account will differ from other savings account so you can make sure you're getting the account you want and need. Generally, a baby savings account offers a better interest rate and more long-term benefits. A baby savings account will also potentially require a second signer to help protect baby's money since the baby cannot take part in the account.
3. What Are the Interest Rates?
Before you sign the papers and open an account, you should check around to find the highest interest rate. This will allow you to get the most for your money especially since this will be a long-term investment.
4. Are There Any Penalties for Closing the Account?
A lot of people don't read the fine print, but in many bank accounts-like other contracts-there are rules and regulations surrounding the closure of an account. You need to know what those regulations are in the event of an emergency and the need to close the account. It's usually in the form of a fee of some level.
5. What Documentation Is Required to Open an Account?
While most bank accounts are the same when it comes to required documentation, because this is specially an account for an infant, the bank may require additional child documentation including a birth certificate and social security card. This ensures the account stays in the child's name and that you are the child's parent or guardian.
6. Are There Any Loyalty Benefits?
Some banks may offer rewards or benefits for staying loyal. If you show them a higher interest rate from another financial institution for the same type of account, they may match that interest rate. They may also offer additional benefits to your other accounts (like higher spending limits on credit and debit cards) if you stay within their family of banks.
A baby savings account is a great tool to help your little one start off right and give you the peace of mind that they are working toward their future and/or college education. Before you open a baby savings account, you need to find out and ensure the account you're getting is what you need to accomplish your goals. Working with a trustworthy bank is also just as essential as the account you're opening.