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Want to get your children interested in saving? Take them on a Savings Safari. A Savings Safari is a program where banks and credit unions open a bank account for kids and make the process fun and interesting. Over the years, this will hopefully keep your child interested in saving and learning about money.

Note that some institutions have similar programs with different names. Just because it isn’t called a “Savings Safari” doesn’t mean it’s not fun and worthwhile. I’ll describe the general idea, although your institution may have another flavor of bank accounts for kids.

Where to Find a Bank Account for Kids

If you need to find an institution that offers a Savings Safari program, start with the smaller institutions. Bank accounts for kids aren’t exactly profitable, so some of the bottom-line oriented institutions won’t even offer them.

How it Works

When you open a bank account for kids, the child should get some fun things or toys that might have a safari-oriented theme. That’s just to make if fun for the kid. What’s more important is that bank accounts for kids typically have lower minimums to open. New parents are stretched enough as it is, and the idea is just to have an account open.

As the years go on, the institution might celebrate the child’s birthday by sending out a certificate as a present. The certificate can be redeemed for various things, but cash is the most attractive. In other words, if the child comes into the branch, the institution will credit the child’s account with a few bucks.

End of the Trip

After age 13 or so, the certificates stop coming. If you think about it, this is actually a good lesson, as it’s getting close to the time when the kid may have to go out and “earn his/her keep”.

Over the years, hopefully the child has learned something about saving and watched the money grow. Also, the child has presumably been to the institution a few times and understands what goes on there – money goes in and comes out, as needed. Of course, the institution benefits by having an existing relationship that will hopefully be a long-time account holder.

529 plans are programs that allow people to save money for higher education. While each state has its own 529 plan, all 529 plans share some features. Let’s look at some basic features to help you save for college or graduate school.

529 Plan Overview

A 529 plan is a program offered by a state. 529 plans are intended for college savings dollars, although some creative people have used 529 plans for other purposes.

Here are some basics of 529 plans:

• Within a 529 plan, you can invest your money for growth
• You may get a state tax deduction if you use your state’s 529 plan
• If you follow all of the IRS guidelines for 529 plans, you enjoy tax-free growth
• The donor to a 529 plan keeps control of the money – it is not irrevocably given to the child
• A 529 plan donor can change beneficiaries (in some cases without tax consequences) – for example, if the oldest child gets a scholarship the parent may shift the 529 plan funds toward the younger child’s education.
• You can make relatively large dollar contributions to a 529 plan – check with your state for detailed limits
• You can use another state’s 529 plan although you need to have a really good reason for giving up the tax deduction

Some Fine Print on 529 Plans

After reading the highlights above, it may sound like 529 plans ideal. However, you should be sure to do some more homework and find out the details of any specific 529 plan that you’re interested in. They’re all a little bit different.

You can find the details on a 529 plan by reading the disclosure statement. Some 529 plans call this the “offering statement” and/or “prospectus”. There, you’ll learn a lot of good information.

Also, be aware that tax laws (such as those revolving around 529 plans) are very complex, and subject to change. You should speak with a qualified tax advisor before doing something that could get you in trouble with the IRS.