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Four Mistakes You’re Making When Teaching Your Kids About a Savings Account

Talking about money can be daunting, and many parents try to avoid discussing finances with their children. However, shielding them from this essential topic may lead to financial struggles in adulthood. Here are four common mistakes parents make when teaching kids about savings accounts and how to avoid them.

Minutes to Read 16 minutes

Age Bracket: 7-30 years old

But in this day and technology, it makes no sense to hide your finances from your children. And worse, if kids don’t learn how to manage their money as they get older, it might permanently harm them. Give your children a solid financial foundation they may build on in the future by avoiding these four typical money mistakes:

 

 

1. Waiting Until Kids Are “Old Enough” to Discuss Money

Did you know that adult money habits are formed by the age of seven? According to a study by the UK government-sponsored Money Advice Service, delaying money talks can result in poor financial habits later in life.

Solution: Start teaching your children about money at any age. Research age-appropriate financial education materials online. Set an example by making wise financial decisions and involving kids in small budgeting tasks, such as saving money while shopping. As they grow older, discuss the family budget with them to instill the value of financial planning.

2. Misuse of Credit Cards

If children see parents using credit cards without understanding how they work, they may develop the misconception that a card provides unlimited funds.

Solution: Explain how a credit card functions by saying, “This card doesn’t give me things for free. I have to pay for everything I buy at the end of the month.” For responsible teens, consider giving them a low-limit credit card and have them pay their monthly bill using their allowance or side income. This teaches them about interest rates and financial responsibility.

 

3. Not Encouraging Kids to Save

Filipino households, on average, save only 5% of their income. If you don’t encourage your children to save, they might not develop this habit.

Solution: Show your children how you save money by using a visible savings jar or taking them to the bank to deposit money. Open a child-friendly savings account, such as the BPI Jumpstart Savings Account or BDO Junior Savings Account, which require only a small initial deposit.

 

4. Failing to Set Short- and Long-Term Savings Goals

Although we don’t know what this child’s objectives are, it appears that he is succeeding in them. It’s great to teach your children to save, but if you don’t give them anything to work for, they’ll become discouraged since they’ll think their savings are going to waste. This frustration may derail the good financial habits you’re trying to instill.

 

Setting short-term financial goals for your children will help them discover the value of accomplishing them. For example, you may have them save up for a movie ticket weekly so they can watch one with their friends.

You can move them up to longer-term goals, such as saving money for a bike, a new Nintendo 3DS, or anything else they might be interested in once they’ve completed a few short-term objectives. Give them an added incentive by offering some assistance for the more expensive goals. For instance, if they aim to save up to P5,000 for a bike, offer to donate P1,000 if they reach P4,000.

 

The significance of educating your children about money is enormous. Avoiding these errors can teach your children the value of handling money properly. They’ll acquire sound money management techniques, self-control when taking money, and self-discipline in accomplishing financial goals. They will already know how to manage their finances before leaving home and entering the outside world. Although it may take some time, the benefits to you and your family will be enormous. Everything else will come together if you teach them the fundamentals.

 

 

 

How many financial services and products are offered to young Filipinos may surprise you. Here are five resources to get your kid started on the path to financial security.

 

1. Create individual deposit accounts

You can use most banks’ kid-specific savings accounts, including BDO Junior Savers, BPI Jumpstart Savings, Metrobank Fun Savers Club, UCPB Kiddie Max, Eastwest Bank Cool Savers Kiddie Account, RCBC Wise Savings, and others. Some of these accounts even permit children as young as 0 years old to apply, of course, with a guardian. You show them how to manage their money responsibly while setting money aside for the future.

 

2. Role-playing a dream job

A recently created play city called KidZania takes learning to another level by allowing kids to be adults for a day and administer a municipality. This is in addition to board games like Monopoly or Praxis, where kids can learn about taxes, expenses, money, and the like (complete with paved streets, a transport system, and a functioning economy).

 

3. Create and manage a business

Your youngster can accomplish this and more (with your blessing and guidance). To help your child develop their entrepreneurial spirit, consider starting a little company with them, such as selling ice to your neighbors or running a juice stand.

 

4. Establish a mutual fund account

You can register a mutual fund account for your kids with the help of the investment companies Sun Life and First Metro Asset Management. The budget would be in your name and held “in trust for” (ITF) your child until they attain legal adulthood because they are under the legal age (18). You can explain the differences between the various types of funds and assist them in selecting the one they want to apply for. Instead of a savings account, you can put your child’s revenues from their small business here to increase its earning potential.

 

5. Buy stocks

Yes, you read that right—your kids can start stock trading. You can open a trading account for your children at AB Capital Securities and COL Financial for a minimum of P10,000 and P5,000, respectively. AB Capital Securities says, “anybody can open an account… even a youngster.” You will manage your child’s account, which will be opened in ITF, and your name until they reach the legal drinking age, like mutual funds. You can begin educating them about public ownership and the possibility of them becoming partial owners of their preferred companies. The earlier your children start investing, as we indicated at the beginning of the post, the bigger the rewards will be.

 

Make sure your children understand that time is their most significant resource as soon as feasible. When it comes to their future, it is never too early to start teaching investing. Start them young and early, then.

 

Similar to putting cash in a piggy bank. But why not put it in a savings account in a bank under their names to make saving for kids safe? Yes, given that more banks are now providing Kiddie Accounts, this is now doable. Teenagers will also be included in this program’s scope. The program debuted on March 8 of last year. Amando Tetangco, Jr., Governor of the Bangko Sentral ng Pilipinas (BSP), stated that individuals 19 years old and younger could open a savings account with a participating bank for merely P100. There will be no minimum balance requirement for the funds. When the account holder becomes 13 years old, Kiddie Accounts are changed to ordinary savings accounts.

 

Currently, 8 banks have signed up for the program. Kiddie Accounts were established in 2011 to assist young Filipinos with sound financial practices. Tetangco continued, “Aside from targeting a bigger market of savers, we also desire to enable those who have started the habit of saving to keep it till they have graduated and started working.”

 

They are as follows:

 

1. Banco de Oro – BDO Junior Savers

Feature

• Initial Deposit Requirement: Php 100.00
• Php 100.00 is the minimum monthly average daily balance requirement.
• Php2,000.00 Minimum Balance to Earn Interest
• Annual Gross Interest Rate 0.25 percent

Service Charges and Fees

• Falling below the minimum balance would result in an account closure fee of Php 300.00.
• 00 for Account Dormancy
• 20% withholding tax is applied to interest earned.

Requirements

1. If the child’s name will be on the account.

• Any of the following must be supplied in original form.
• (In order to confirm)
• Passport
• Student identification card with the principal’s or other school official’s signature
• birth certificate produced by the PSA

 

2. If the parent or legal guardian’s name will be on the account (parental account).

• At least two (2) parent or guardian IDs.
• any of the aforementioned IDs or documents for the child (passport, school ID)

 

2. Bank of the Philippine Island

3. BPI Jumpstart Savings Account

Feature

• A P100 initial investment is required.
• Keeping a daily balance of at least P500 for BPI Family accounts and P1,000 for BPI accounts
• For a BPI Family account, the required minimum daily balance is P1,000; for a BPI account, it is P2,000.

Requirements

• Minimum two legitimate IDs
• Birth Registration

 

4. Children’s Easi-Save by China Bank

Feature

• Passbook
• for children under the age of 12
• Children under the age of seven can open In-Trust-For (ITF) accounts.
• The initiation fee is 500 pesos.
• A 500 peso minimum balance is required to earn interest.

 

5. Development Bank of the Philippines – DBP – Young Earners’ Savings Accounts (YES)

Feature

• for young children (12 years and under)
• A 500 peso minimum first deposit
• DBP In Trust For (ITF) Savings Accounts Opened by Parents on Behalf of Their Minor Children

 

 

6. EastWest Bank

Feature

• Initial Deposit Requirement: P 2,000.00
• Upkeep of ADB:P 2,000.00
• Interest-Bearing Account:P 2,000.00
• Interest:.25% per annum
• 20% withholding tax
• Access to Funds: Over-the-Counter
• Mobile access and Internet banking
• Passbook: Transaction Record

 

7. Yippie Savings Account from Maybank Philippines

 

Feature

 

• Get free personal accident insurance that covers you seven days a week, 24 hours a day, for a maximum of Php 500,000 or five times your preceding month’s ADB.
• 10% of the personal accident insurance coverage is a free medical reimbursement benefit.
• Observe the funds in a passbook, and get free access to them at any Maybank ATM in Malaysia, Singapore, Cambodia, or Brunei with a regional ATM card!
• Rate of interest*
• 250% for balances between PHP5,000 and PHP199,999.99
• 500% for balances greater than Php 200,000

 

Requirements

• The child’s birth certificate must be provided for an In-Trust-For (ITF) account.
• A valid ID for each parent or guardian
• For those who are underage or students, a school ID (photo-bearing and signed by the Principal or Head of School)
• Birth Registration
• Libraries ID
• IDs must be valid and up-to-date.

 

 

Features and requirements

• NSO Birth Certificate for the Child
• The ID of the student, fully attested by the school’s principal or head of school (for the student)
• Two 1×1 recent ID photographs
• An initial deposit of PHP 500.00 (this is also the required maintaining balance)
• Interest-earning Balance: P4,000
• Interest Rate (yearly or annually) -0.25
• Service Charge for Accounts Falling Below Maintaining Balance (for 2 Months Consecutively) -P300

 

Requirements

Fully completed bank forms:

• Individual Client Customer Information Sheet (CIS)
• Signed Card
• Instructions for Signing and Acknowledging the Receipt Form
• If parents or guardians want to use the automatic intra-bank fund transfer service, they must submit a fully completed Interbank Fund Transfer (IBFT) Enrollment form.
• The parent or legal representative-signed quit claim or waiver (only for PSBank Kiddie Savers and Teen Savers Accounts with PSBank Debit Mastercard)

Additional conditions for guardians creating ITF accounts include:

• Beneficiaries and Beneficial Owners’ Customer Information Sheet (CIS)
• To open and manage an ITF account on behalf of the ward/s, you must provide proof of authority in the form of a court order.
• Valid IDs

Parents / Legal Representatives:

• Two legitimate secondary IDs, one of which has a photo and signature, or at least one primary ID

 

Why Open a Savings Account for Kids?

Opening a savings account for children helps instill financial discipline early. Several banks offer accounts tailored to minors, often with lower initial deposit requirements and incentives like insurance benefits.

By starting early, children and young adults develop smart financial habits that set them up for a secure future. Whether saving for a small purchase or long-term goals, a savings account is a great tool to teach financial responsibility.

 

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