How to Use a CD to Teach Your Child About Money

If you want to raise money-smart children, it’s important to start when they’re young. Money can be an abstract concept, so using real-life financial situations can be helpful. Capitol Federal® offers a special Blue Bucks Kids' Certificate of Deposit account designed to make learning about money fun. As your child puts money into a CD, they’ll learn about:

• The value of saving. Since most CDs are set up with minimum term limits and a penalty for early withdrawal, your child can’t use the money for an impulse purchase. They’ll learn that delaying gratification can lead to greater rewards in the future. 


• How interest works. The idea that you can make money from money may seem confusing to your child. Watching the value of a CD grow can help your young one see how interest accumulates. 


• Financial decision making. When a CD matures, your child will have the choice of either withdrawing the money to spend it or reinvesting it to earn more interest. 

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Categories: CapFed® News , Money Smart Kids , Strategies for Saving , Smart Spending
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