What is a Savings Account? A Simple Explanation for Kids, Teens and Beginners

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Introduction to Savings Account for Kids and Teens

This video explains the concept of a savings account in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about it, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.

Suitable for students from grade levels:

• Kindergarten
• Elementary School
• Middle School
• High School

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Infographic: What is a Savings Account

Infographic: Click Here to Download

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Quiz: Bank Accounts

You use a bank account all the time, but do you know how it really works?

Take this short quiz to find out how well you understand the basics of banking.

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What is savings account?

A savings account is an account for storing money while you earn some interest from it.

But how much interest do I make from a savings account?

It changes from time to time, but in 2018, it is 0.1% – 1.5% per year depending on the bank.

Why should you have a savings account?

That’s really low interest… So what’s the point of having a savings account?

Well, first of all, your money is absolutely safe and can be stored for short to medium term goals, like a down payment for a house or a car, or it can be used for an emergency fund.

Can I deposit money from my piggy bank in a savings account?

Yes, you can – it would be a lot safer there, and it would earn some interest.

How many savings accounts can I have?

Well, you can have any number you want!

Can I move money from one savings account to another savings account, or even to a checking account?

Yes, you can do that. But usually, there is a restriction on the number of times that can be done in a month.

Who should have a savings account?

Well, anyone who is saving for short to medium term goals and needs a safe way to earn some interest. And anyone that’s also building an emergency fund.

Is there any fee associated with a savings account?

Yes, most banks have $5-$10 monthly fee. But that can be waived if a minimum balance is maintained. Depending on the bank, the minimum balance is usually $300-$500.

The fee could also be waived if the savings account is linked to a checking account.

But how do I open a savings account?

It’s very easy to open a savings account. You can do it by visiting the bank’s branch, or you can do it online.

You just need your social security number and a photo ID, like your driver’s license.

But how do I choose a savings account?

Like, are some better than others?

You should pick a bank that is FDIC insured, just for safety. And you should also look for high interest. And also if you can, choose a savings account with no monthly fees.

Whoa… That’s a lot about a savings account! Thank you very much for telling me what a savings account is.

You’re welcome Sooper Cooper. Remember, finance is your friend!

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Video Featured in the Below Financial Literacy Course for Kids & Teens

• Course: Basics of Banking

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Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids & Teens

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Podcast: What is a Savings Account?