Teaching children to save money can be difficult but there are resources here in Austin that can help you do that.

Pamela Cotton, the vice president of member services at Austin Telco Federal Credit Union, joined Studio 512 Host Rosie Newberry to tell us how they can help.

We’ve discussed share certificates in the past, could you give us a refresher on what exactly a share certificate is?

“A share certificate is a type of savings account offered by credit unions that lets the depositor earn higher dividends. There is a set term, and you cannot make additional deposits during the term. You may take a withdrawal, but penalties will apply if the share certificate has not matured.”

What’s the difference between a youth share certificate and a regular share certificate?

“A regular share certificate is open to those who are 18 years and older. You choose a term and are locked in for that term and gain dividends on your money during that time. The Youth Share Certificate operates the same, but it is designed for those under 18 years old. The minimum to start a Youth Share Certificate is significantly lower than a regular share certificate. There is a
set maximum amount for the youth share certificate to earn those significantly higher dividends.”

“Dividends are compounded and paid monthly, and we allow additional deposits at any time in increments of $25, which is something you cannot do with a regular share certificate. Our Youth Share Certificates are set on a 12-month term and auto-renew until your child reaches the age of 18.”

How does opening a Youth Share Certificate allow parents to help their kids learn about savings and investing?

“Their account mimics an adult account, but the set limitations help to keep them from having a negative banking experience. It helps kids learn different ways to save other than just a savings account so they are aware of their options when they are older. It teaches them the discipline to wait and watch their money grow over time and teaches them about the consequences of withdrawing money from their savings because of the penalties that come with early withdrawals.”

“It is also an added benefit to opening a Telco True Youth Account starting this summer. It helps to show and teach kids different ways to keep and use their money.”

If you would like to learn more about the new Youth Share Certificate, visit ATFCU.org.

This segment is paid for by Austin Telco Federal Credit Union and is intended as an advertisement. Opinions expressed by the guest(s) on this program are solely those of the guest(s) and are not endorsed by this television station.