When I was growing up in the 1940’s and 1950’s every family had savings accounts and their children each had a interest bearing savings account. During World War II people bought savings stamp books and bought the stamps and pasted them in a little booklet like the old Green Stamps saving stamp booklets. The war taught people to save and made families feel good about it.

Moving forward to the last ten years, savings accounts have not been a good investment until the last couple of years. The collapse of the economy at the end of George Bush’s administration that had the Federal Reserve decreasing the prime rate over and over again for the years that followed. Interest rates were totally unattractive, like 1% even as low as .25% on savings. CD rates ranged were about 2.5 per cent just three years ago, then they started to increase very slowly. Still families did not have the money to save and did not have the incentive to save because the rates were so low

Two years ago we bought a $20,000 CD yielding 3.00 per cent for fifteen months. Since that time the CD rate for fifteen months from the same bank has increased to 5.25%. Now the same bank offers a 4.60 interest bearing savings account that pays interest on the balance in the account on an annual basis of 4.60 with no penalties for withdrawing money as needed. I now have that savings account and it works great, I needed $3,000 and went on line made the request and it was transferred into my account within three days. I get a statement from the bank monthly showing the interest that has been added to my account balance.

There are many banks and offers on the web if you want to see if setting up a savings account or purchasing CD’s. Be sure that bank you pick is Federally guaranteed and has a good business rating.

It is a good idea now that rates are higher to teach you children to save and acquaint them with how savings accounts work. It will amaze a child how they can get a little bit of money for the bank using their money and if they save long enough it can be a significant amount to help pay for their education.