ING Direct has started offering Orange4Kids , a kid’s version of their online savings account. It’s pretty much everything you like about the Orange Savings Account except with training wheels. For example, it’s FDIC insured, has no fees, no minimum balance requirements, earns 1.00% APY interest (at the moment), and you can login with a customer number and PIN.
Where are the training wheels? Well, kids can only check balances. They can’t move money around on their own, an adult has to sign in with a separate customer number in order to make transfers. The training wheels don’t come off until the kid turns 18, at which point it converts to a regular Orange Savings Account.
My reaction to this is like my reaction to when I heard about playing Monopoly using debit cards  instead of the funny money. It’s a little too much “adult” interjected into a child’s life. It’s hard enough managing your money as an adult after it’s been abstracted away into numbers on a screen, imagine how hard it is to properly teach kids about it. That said, I don’t have any kids so I’m not really too wise about that stuff.
I think it’s great to instill the importance of savings, I’m just not sure a kid’s savings account is the best way to do it. Now, if they went to route of Affinity Bank’s Kids Only Savings account  (minus the bank failure), that might get me interested. 🙂