Why a Traditional Bank Savings Account Doesn't Teach Your Kid How to Save

Less than a penny in interest for a year of saving? Seriously?

What’s the best way to teach your youngster about saving and the power of compound interest?

Everybody knows you march your kid straight down to the local bank or credit union and open up a traditional savings account. Right? That’s certainly the conventional wisdom.

In fact, opening a savings account for your 6 year old is the “official” wisdom too. So says the panel of financial experts who make up the United States President’s Advisory Council on Financial Capability. It’s item 8 on their list of 20 things kids need to know to live financially smart lives.

My take? That’s complete bullcorn.

Let’s just think about this from a 6 year old’s perspective for a moment: