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Editor’s note: The following article summarizes programs offered by a sample of local banks to children and teenagers in Delaware, New Jersey, and Pennsylvania. We selected these programs because they demonstrate how banks have been innovative in encouraging children to develop a habit of saving money. Many other area banks and credit unions have savings programs for young people. The banks included in the article noted that they offer youth savings programs to build relationships with young people who may become long-term customers and build or strengthen the relationships with their parents.
Dover High School in Dover, DE, is one of the few high schools with a banking program that includes operating a bank-like facility open for three periods each school day. The Dover High School bank looks like any other bank branch, with teller windows and machines, a station with deposit and withdrawal slips, a vault, and security cameras. The bank opens new accounts for students, accepts deposits, and disburses withdrawals. In addition, students are the bank tellers.
The program, started in 2001, is led by Pamela Moore, the business department team leader and Academy of Finance* director at Dover High School. When Moore began teaching at the school, she had 12 years of experience working at a bank, including as a head teller, and wanted to open a bank at the school to teach her students the importance of banking and financial management. Moore and Nancy Wagner, currently the school-to-work coordinator at Dover High School and a state representative, worked with Gail Fink, a former branch manager at Wilmington Trust, to develop the program, which was subsequently approved by Delaware’s state banking commissioner.
Moore uses her banking experience to teach her students how to operate the bank. Before becoming bank tellers, the students must take her principles of banking class. In their senior year, they must also take an additional class in banking. The students are responsible for completing all transactions with bank customers. Moore said that approximately five to 25 transactions are completed daily.
Each day by 3 p.m., Moore ensures there is a large enough cash reserve in the vault to meet banking needs for the next day. She then takes the cash deposits and documentation to a local Wilmington Trust branch. Tellers at the branch validate withdrawal and deposit slips, process paperwork for new accounts, and update daily transactions in their system. Moore also maintains a master bank account for the school’s banking activities. Wilmington Trust does not consider this bank one of its branches and no bank staff members are located at the school.
Students are able to open noncustodial savings accounts without having a parent co-sign. They must provide a Social Security number and a form of photo identification. A minimum deposit of $5 is required to open a Wilmington Trust savings account through the school bank.
Since the Dover High School bank opened in 2001, 167 students have opened new accounts at the school bank, and other students that have opened accounts at Wilmington Trust branches use the school bank. In addition, 17 Dover High School clubs and committees, as well as a number of teachers and staff members, use the school bank.
Dover High School teacher Pamela Moore (right) is shown at the school bank with two tellers, junior Tylisha Darling (left) and senior Whitney Harmon. Wilmington Trust donated equipment for the school bank.
Each year, Newfield National Bank in southern New Jersey sends letters to 120 different schools, offering to provide educational presentations to students on saving and the advantages of opening a savings account. About 10 to 15 percent of the schools accept Newfield’s offer. Newfield branch managers who visit the schools provide students with an educational workbook, pencils, crayons, a ruler, stickers, and a $5 coin book with 20 quarter slots. When a student fills the coin book, he or she can bring it to any Newfield branch to open a children’s savings account, and the initial $5 savings is matched by Newfield. Throughout the school year, Newfield branch managers visit the schools each month to accept deposits.
Newfield offers the savings program to all children under the age of 18. Children who attend schools that do not participate in Newfield’s educational program can obtain a coin book from any Newfield branch and receive a match when they open an account. The savings accounts are noncustodial and can be opened as individual accounts or joint accounts with a parent. In order to open either type of account, a child must provide his or her Social Security number. Parents must also provide their identification if a joint account is opened. The program has no minimum balance requirements or service fees. Children can deposit and withdraw money at Newfield’s 12 branches in Gloucester, Cumberland, and Cape May counties.
Newfield said that the children’s savings accounts have been available since 2000, but the program was enhanced in 2003 when the bank began to visit local schools. The bank had 437 children’s savings accounts with $280,000 in total deposits as of October 2006. Nearly all of the children who have opened accounts have completed a coin book and received the $5 match.
Beginning in the mid-1930s, Beneficial Savings Bank staff members went to schools in the Philadelphia area each week to collect student deposits. In 1995, Beneficial ended this program of collecting money in schools and began the Student Saver program to reach more students.
The Student Saver program, available to students between the ages of seven and 17, has no minimum balance requirements or service fees. The savings accounts are noncustodial and parents do not need to co-sign when students open accounts. The student must provide a Social Security card and birth certificate to open the account. Students are able to deposit or withdraw their money from any of Beneficial’s 39 branches in the greater Philadelphia area. In addition, when a student opens an account with at least $5, Beneficial provides a $5 match. The bank also offers periodic prizes and incentives for participating in the program.
Beneficial said that it had 4,591 Student Saver accounts with $2.2 million in total deposits as of October 2006. The bank estimates that it has provided matching funds of $20,000 since the program’s inception.
CommunityBanks, headquartered in Harrisburg, PA, offers a savings program for children age 12 and younger, MegaBucks Kids, and one for teenagers, Teen Depositor. MegaBucks and Teen Depositor accounts are custodial accounts, and parents need to co-sign and provide their identification along with their children’s Social Security numbers when opening an account. Both the MegaBucks and Teen Depositor accounts have minimum opening deposits of $10, but neither has minimum balance requirements. The bank does not charge service fees on the two accounts, which may be opened at CommunityBanks’ 72 branches in southeastern Pennsylvania and two branches in Carroll County, Maryland.
Children can visit the branches and enter their names in a drawing for a prize awarded at the end of the quarter by each branch. In addition, the branches host a “kids’ banking day” on the last Friday or Saturday of the month. On this day, there is a special teller window decorated for the children and they can enjoy snacks and receive gifts for opening accounts and making deposits. They also receive birthday gifts, such as a piggy bank.
CommunityBanks created a mascot called Buck to teach lessons on such subjects as saving money and safety. Buck participates in community activities and visits bank branches. The MegaBucks program began in 1996 under the former Peoples State Bank, which was acquired by CommunityBanks. The Teen Depositor program began in 1997. CommunityBanks said that as of October 2006, there were 11,000 MegaBucks accounts and 5,000 Teen Depositor accounts; the average account balances were $450 and $715, respectively.
For information, contact Guy Cunningham of Wilmington Trust at (302) 651-1624 or firstname.lastname@example.org; Pamela Moore of Dover High School at (302) 672-1919 or email@example.com; Mark Mastro of Newfield National Bank at (856) 691-1325 or firstname.lastname@example.org; Anthony Lloyd of Beneficial Savings Bank at (215) 864-6028 or email@example.com; and Kristine Good of CommunityBanks at (717) 354-3615 or firstname.lastname@example.org.