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19 February 2018, Sydney, Australia – New research by finder.com.au, the site that compares virtually everything, has found nearly half of Aussie kids have a savings bank account set up for them by their first birthday.
According to the research, one in four children (26%) have a bank account opened in their name from birth, while a further 23% have one within their first year of their life.
Bessie Hassan, Money Expert at finder.com.au, says she was surprised that close to 150,000 babies born in 2017 have (or will have) a savings account by the time they turn one.
“It’s an extraordinary number of parents who are setting up banks accounts in their newborn’s names.
“The ink on the birth certificate has barely had time to dry and the babies are already receiving bank statements but it’s necessary to help kids get ahead financially,” she says.
The research also found more than 11% of children have their own bank account set up sometime between their first and fourth birthday. Of these, the majority (69%), have money put aside for them by the time they turn six years old.
Ms Hassan reassures parents that there’s no right or wrong age to open a savings account for a child, nor is there a golden amount or frequency to be depositing cash.
“Some parents may choose to deposit cash on their child’s birthday and Christmas annually, while others may choose to make smaller yet more regular contributions at more frequent intervals.”
“For example, if you put $100 as an initial deposit and continued to make $100 monthly deposits, with an average rate of 2.05%1, they’d have $26,242 by their 18th birthday,” she says.
Ms Hassan says in addition to the savings, there’s plenty of positive reasons for parents to consider setting up a savings bank account for their child.
“A lot of parents have experienced first-hand how stressful finances can be and don’t want their kids to have those same worries.
“Further to minimising stress – financial literacy is an extremely valuable skill that parents can teach their children from very early on which can have a huge impact on how kids handle money as they enter their adult years.
“Depending on their age, creating a bank account for your offspring will teach them basic principles like saving, budgeting, and the effect of compound interest.
Ultimately, you want to educate your kids about the value of money so they learn to be financially independent, and also so they don’t think money grows on trees!,” she says.
1Average savings rate when introductory bonus rates are taken into account, according to the Reserve Bank of Australia (RBA) as of January 2018.
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Disclaimer
The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com.au's review pages for the current correct values.
About Finder
Every month 2.6 million unique visitors turn to Finder to save money and time, and to make important life choices. We compare virtually everything from credit cards, phone plans, health insurance, travel deals and much more.
Our free service is 100% independently-owned by three Australians: Fred Schebesta, Frank Restuccia and Jeremy Cabral. Since launching in 2006, Finder has helped Aussies find what they need from 1,800+ brands across 100+ categories.
We continue to expand and launch around the globe, and now have offices in Australia, the United States, the United Kingdom, Canada, Poland and the Philippines. For further information visit www.finder.com.au.
12.6 million average unique monthly audience (June- September 2019), Nielsen Digital Panel