If you are the teen looking to own that sports car one day or just mellow on the beach; looking at saving is a great place to start. If you are looking at monthly savings accounts there are a few things to watch out for.
The first thing to decide is if you are going to be saving the same amount every month or not. This is important because some accounts want you to save the same amount each month.
Next decide if you can be without that money you are saving. Can you leave it in the account or will you want to draw it out often? This will help you decide what type of account to open. Monthly savings accounts have different rules. Some have penalties if you draw your money out too soon.
Now it is time to find somewhere to open your account. The article on Teen Savings Advice will help you when deciding where to save. Most teens start off going to the bank to save. At the bank they may talk about a policy or unit trusts. We will cover these investments in another article. They are complicated and will need you to learn about them if you decide to put your money into them.
In this article monthly savings accounts are cash accounts. You put your money in the bank monthly and it stays there earning interest. The more money you put into monthly savings accounts the more interest earned. Interest is a percentage of an amount of money. So if it is 5 percent then you will look at taking the amount of money, multiply by 5 then divide by 100. This is a simple interest calculation. We will look at interest in a workshop. Most monthly savings accounts work on compound interest. This formula is a bit more difficult. So it will be explained in the interest workshop.
This is a discussion on Monthly Savings Accounts and not financial advice.
Reference for: Monthly Savings Accounts For Teens