Even a small savings account for your child could make a powerful difference in their future.
A recent study shows that children from low- or-moderate-income families, who have a savings account for college, are three times more likely to go to college, and four times more likely to graduate college—even if the account holds less than $ 500.
Parents often want to open accounts for their children, to help them learn about saving for the future and managing their money. And young people often go to a bank to open an account when they get their first job and start earning money.
However, when trying to open an account for a child under age 18, some people run into roadblocks.
Whose name should the account be in? Who has to sign for it? Questions like these can be hard for the young person, the parent or caregiver, and even for the bank or credit union. This could mean that some children and teenagers are missing out on this important way to build their financial future.
Clarifying the rules
To help, federal banking regulators have issued guidance for banks and credit unions when they’re asked to open savings accounts for children under age 18.
For parents, this means:
- Youth savings accounts are protected by the same federal consumer protection laws and regulations as other accounts.
- More schools may be working with local financial institutions to provide financial education and opportunities for children to open accounts. The new guidance explains the federal rules on when accounts can be opened at school.
- Some states may not allow minors to open their own accounts. However, a parent can still open an account for the child and can consider putting both names on the account.
Teaching kids about money and saving
Financial skills are important in life and getting kids started early with good financial habits and savings can make a big impact on their financial futures. We’ve got some answers to your questions about teaching kids the money basics and ideas for how to get started.
Continue Reading
Today, we’re releasing our third Snapshot of Complaints Received from Servicemembers, Veterans and their Families. The report details the data and trends from consumer complaints we’ve received from members of the military community since July 2011.
Here are just a few highlights:
- Debt collection complaints have continued to rise since our last report, and now make up 39 percent of total complaints. It is our largest category of complaints from the military community.
- Credit reporting remains a top category of concern. 72 percent of these complaints are about incorrect information on credit reports. This remains a significant issue for the military community, one that we highlighted earlier this year.
- Student loans are another concern. 49 percent of these complaints are about problems dealing with a lender or servicer. In these complaints, we continue to see long-standing trends, such as servicemembers complaining about not being provided their Servicemembers Civil Relief Act rights.
This year our report also highlights our outreach efforts that allowed us to connect with thousands of members of the military community, as well as three of our enforcement actions that recovered millions of dollars for affected consumers, primarily servicemembers, veterans, and their families. These figures represent the positive impact of the work we continue to do on behalf of those who serve.
Problems with account services
Basic account servicing stands out as a significant area of concern for servicemembers. Most consumers can call their financial institution, visit a branch, or connect online to try and get the help they need to maintain their account. Unfortunately, for military personnel and their families, the realities of military life, including deployments, frequent moves, and a high operational tempo, can sometimes make access to those services extremely challenging.
We found that servicemembers were often subject to a variety of account maintenance or penalty fees, as well as account-access restrictions, which were triggered due to aspects of their military service.
These problems raise concerns that financial institutions may not have a true understanding of the servicing needs of their military customers and may lack proper procedures and protections for them. Detailed examples of servicemember experiences can be found in Section II of the report.
Check out the snapshot to learn more.
We’re listening
As always, if you have a problem with a consumer financial product that you can’t resolve on your own; or if you know someone in that situation, please remember that you can submit a complaint online or by calling (855) 411-2372. We make your voice heard.
