The Rural Voice, 1992-04, Page 20I
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16 THE RURAL VOICE
PROFESSIONALLY SPEAKING:
MONEY - WHAT WILL WE TELL THE
CHILDREN?
Professionally speaking is a new
monthly column featuring a different
expert each month.
BY GEORGE HEISZ
A famous comedian once said: "A
bank is a nice place to visit your
money." This implies that it's like
going to the zoo — you observe the
orangutans from a distance but you
have no idea how they are cared for.
A lot of people think banking is
intimidatingly complex but often they
don't ask us to explain. Young people
do though. They're especially inte-
rested in what their money is earning,
how electronic banking services work
and how to use credit cards.
In this article, I'll share with you
some of the insights we have on young
people using bank services. Some of
their questions and the information we
give them may be of use to your
children or other young people you
know.
70 per cent of teenagers have
accounts
The Canadian Bankers' Associa-
tion, in its research of the market, has
found that 70 per cent of teenagers have
a bank account. Most of them are eager
to begin using banking machine cards
and credit cards. Here are some
questions that they ask:
I want to open a bank account to
save some money. How much do I
have to put in?
There is no set amount you must
deposit to open an account. Start with
whatever amount you wish and make it
grow to earn increasing interest.
What's the best way to get money out
of my account when I need it?
That depends on how often you are
going to need money from your
account. If your withdrawal needs are
low, you may want a savings account
with a minimum number of
withdrawals each month for which
there is no charge. But, if you make a
lot of withdrawals, you may be better
off with a chequing account. Some
banks offer youth accounts especially
for customers under the age of 19.
These accounts have no charges for
cheques or any other services.
I'm going away to school. Can my
parents make deposits to my account
for my school expenses?
Yes. Because banking is so elec-
tronically sophisticated today, certain
banks can offer you instant access to
money deposited to your account from
anywhere in the country.
Can I give my parents or my brother
permission to take money out of my
account?
You may choose to give Power of
Attorney to someone in your family
who has reached the age of majority.
This legal document is kept in your
account file at the branch. Unless you
do give this kind of legal permission to
someone, no one else can make
withdrawals from your account.
Incidentally, anyone can deposit to an
account for which he or she has the
number.
I made $5,000 this summer. It will
be used for my expenses at school
this year. What type of account
offers the best return if I'm taking
out $400 a month for my rent and
other expenses.
If $5,000 will be the maximum
balance in the account throughout the
year and will be gradually decreased
by monthly withdrawals, you would be
wise to maximize the interest earning
capacity on the gradually decreasing
balance. A youth account, offered by
some banks for customers 19 years of
age or under, will probably be your best
choice since there are no charges of any
kind.
For anyone not eligible for a youth
account, a tiered chequing account is
probably best. These accounts offer
particular benefits depending on the
balance. For a $5,000 balance, you
might have free chequing up to a level
of perhaps $600, a savings rate for the
portion of the remaining balance
between $600 and $3,000, and a term
deposit rate between $3,000 and
$5,000. This means that all portions of
your money keep earning interest while
are not being used.0
This article has been provided by
George Heisz, Area Manager, Bank of
Montreal. Mr. Heisz is located in
Hanover, Ontario.