When Should You Get An Adult Savings Account?
10 Nov 2015
If you’re one of the many students set to graduate from high school soon, it’s entirely likely that for the last several years your bank account has been one of the youth banking variety; a 17 and under account or something similar. But at the age of 17 or 18, you might feel that you’ve outgrown your childhood bank account, and that’s fair enough.
Many banks offer accounts and products specifically tailored for young adults and university students, and you may find those to be a more attractive option than the savings account your parents set up for you when you were twelve. We understand that 100%, so we’ve put together a guide on how to graduate from youth banking.
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Get a grown-up savings account
When you decide to make some changes to the way you bank, your savings account is the first thing you should look at.
Take Commonwealth Bank for example; their Youth Saver is a savings account for people aged 18 and under, which offers a bonus interest rate if you make no withdrawals. This is all well and good for a young child who doesn’t manage their own account, but as you get older and start to manage your own money, you might make a withdrawal here and there. Sticking with Commonwealth Bank, your savings would be much better off relocated to a NetBank Saver, which currently has an interest rate of 1.85% p.a., and no penalties for withdrawals (that’s not a recommendation by the way – there are plenty of online savings accounts to compare).
Swap your keycard for a debit card
You probably went through high school with an EFTPOS card; a bank card perfect for kids, due to the fact that it has no credit capabilities and you can’t shop online using one. While we’re not suggesting you get yourself a card with credit capabilities (at least not yet), you may well want a card that is a bit more tech-savvy.
These are like your EFTPOS card, but with a few important differences – first, they generally have PayPass or PayWave enabled, which is convenient if not massively important. However the more important difference is that with a Visa/MasterCard debit card, you can use it like a credit card in the sense that you can shop online with it, and in that sense only. You can’t spend money that you don’t have with it, but if you want to buy something online, you can pay with your debit card, which is probably a rather attractive prospect to a young adult.
If you are considering a credit card, it might be best to do some research first before potentially getting into debts you cannot pay. Have a look at our article on using a credit card as a student.
Figure out what’s going on with your super
No-one expects you to know what’s happening with your super. You’re in your mid-late teens, you’re not expected to know your super balance, or where your money is invested. However maybe you should start educating yourself, so that you can start growing your superannuation early. We’ve said it before and we’ll say it again; knowing the ins and outs of your own superannuation account is all pros and no cons. On top of that, voluntarily contributing to it now might seem like throwing away money, but you’ll thank yourself when you’re 70 and living in comfort.
Start being sensible with your money
The most common-sense part of this list, this also happens to be the most important. No-one’s going to blame you for spending all your money in high school, frivolously or otherwise. However once you’re out of high school, savings become incredibly important rather than just “nice to have”. So if you’ve got income, make sure you draw up a plan or budget so you can start saving some of that money you’re earning; you’ll appreciate the importance of savings if/when you’re slugged with an unexpected expense and your parents want you to pay it.
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Graduating from youth banking isn’t quite as exciting as graduating from high school, but it does create a feeling of responsibility and maturity that you might enjoy a lot. So once you’re done with high school and Schoolies, try looking in to getting some of the stuff on this list done, and leave your youth accounts in the past.
Canstar’s 2022 Outstanding Value – Junior & Youth Banking Awards recognise the institutions offering outstanding value to Australian consumers through their suite of junior and youth banking products.
