Opening a Kids Savings Account to Teach Saving and Investing at an Early Age

There are two things my kid loves doing – playing with my iPad or playing games on my laptop. So being a personal finance aficionado I decided to leverage his electronic interests and my goal to teach him the value of saving (to invest later off course) by opening his own Kids Savings account at ING Direct. I have been an ING customer for a long time and it was a pretty easy decision to open a savings account for my son with them. Easy to use, no fees, FDIC insured and a competitive interest rate are just some of the best features of this savings account.

What I especially liked though is how they have made their accounts kid friendly by adding their Planet Orange kids zone feature. This is an interactive gaming zone for kids (grades 1 – 6) that teaches them the basics of personal finance in a way that keeps them interested – and coming back for more. It also provides a number of techniques and supplements on how parents can motivate their kids (and perhaps themselves) to manage money.

Once you sign up for a free account your child will have their own ID that they can personalize and use to check their savings balance online 24/7. I suggest giving the account the name of a toy or experience they want, so it provides a motivation to save and watch their balance grow. Moving money in and out does require the adult to sign into the account (they get a separate sign on ID and PIN).

I started the account with $100 and told him I would add $10 every month if he completes his homework and does his chores. I also explained the concept of interest and compounding, but I think seeing it in action and playing “Planet Orange” will be a much better lesson. If you want to teach your kids valuable lessons about money management from an early age, then the Kids Savings Account should definitely be on your list of financial resources to try. There is little risk and you can easily close your account (online as well) if you want.

Tax Implications and Security

Two important things to consider when using any financial product are taxes and security/privacy. The Kids Savings Account provides excellent security features and their website has an extensive policy section on their commitment to privacy. Their Planet orange interactive feature is fully COPPA (Children’s Online Privacy Protection Act) compliant, and no personally identifiable information from any child is collected. In terms of taxes you’ll receive a 1099-INT tax form, as with any other savings account, and will have to reflect this in your tax return. But this is pretty straight forward and managed via any good tax software package.

Click here to open your FREE Kids Savings Account

Disclosure: While I am ING Direct customer and fully endorse the Kids Savings Account, I do have an affiliate relationship with ING Direct and will earn a commission if you sign up for a free account via one of the links in the article. If you do, I absolutely appreciate it and if you have any further questions please leave a comment below!