When it comes to opening a savings account, earlier is always better. Especially in Ireland, it can be extremely beneficial to start accounts for children at a young age. Personally, I believe that opening a savings account was a very influential step in the shaping of my financial views.
My first savings account was opened after my first communion, and I’m sure that many other irishmen have had this same experience. For me, this was a huge deal. The money I had gotten from such a special time in my life was now being used to finance my future.
As a child, it is easy to get lost in the concept of money, when you have cash or coins in your hand, it is far more valuable than any amount on a written check. Because of this child-like wonder, the actuality of the value of money is highly skewed.
By teaching your children early the power of independent saving and investing, they will be given the tools that enable them to continue down a more financially stable path in the future.
Additionally, in many Irish banks children up to 12 have the opportunity to open a bank account with the help of a guardian. These accounts can collect interest of 2.5% annually, with the balance below or at €5000 at the Bank of Ireland. Other bank options vary.
The 2.5% interest rate exceeds or matches some of the best adult interest rates available. Furthermore, it gives those first communion deposits an opportunity to grow quickly without any extra effort from the child. These high cap accounts also allow children the opportunity to continue depositing up to the age of twelve before changing the account’s status.
At many bank establishments, children over the age of 12 can begin opening accounts of their own, which many times provide them with a cash card or debit card. By instilling the ideals of saving into your child at a young age, they may be less inclined than other people of their same age to spend their money.
Throughout my years as a young adult, I am able to understand the need for financial literacy and appreciate my skills in saving. At university, there is a distinctive difference between students who buy their own luxuries and those who do not.
When you teach your children to handle their finances with care, they will thrive.