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Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

Youth Banking Resource Center

The Promise of Youth Savings Programs

Youth Savings as a Promising Strategy for Young People

School-based experiential financial education is among the most promising frontiers in the field of financial capability. This method of teaching can support students’ independent decision-making, take advantage of teachable moments, provide opportunities for repeated practice, and incorporate planning and goal-setting—all of which help build important skills and positive financial habits. Participants not only learn key financial concepts, but also form positive attitudes and behaviors that can help them become financially capable adults. Moreover, students who participate in financial education that includes a hands-on saving component are more likely to demonstrate financial knowledge than their peers.

The FDIC’s two-year Youth Savings Pilot was designed to identify and highlight promising approaches to experiential financial education—that is, approaches that combine traditional, classroom-based financial education with the opportunity to open a safe, low-cost savings account. Specifically, the pilot aimed to identify approaches that help school-aged children develop strong financial knowledge and good financial habits and attitudes. During the 2015–16 school year, the 21 banks participating in the pilot created over 4,500 youth savings accounts and provided financial education to thousands more children. A majority of the banks that participated in the pilot expanded their outreach programs to engage even more young people over the course of the school year.

The programs carried out by the 21 Youth Savings Pilot banks (Appendix A: Youth Savings Pilot Programs) were diverse. Approaches used by pilot programs included opening school-based branches, setting up in-school banking operations in common areas so that students can make deposits on designated “banking days,” and helping students to use nearby bank branches to open accounts. Financial education strategies included using the FDIC’s Money Smart curriculum, offering workshops for students and their parents, and overseeing peer-to-peer financial education instruction.

The pilot findings can help banks and their partners start, enhance, or expand youth savings programs. The pilot demonstrated that the benefits of a savings program go far beyond the dollars and cents deposited into the accounts of school-age children.

Benefits Observed by Participants in the FDIC Youth Savings Pilot

Banks in the pilot identified a range of benefits, including:

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