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Wall Street bankers are always thinking of ways to separate you from your money. One of their best inventions of the last decade was probably the 401k and IRA, because both financial instruments led people to move their money from traditional banks, where that money was insured by the government, into the stock market.
Some investors have done well in the market, while others have lost their entire retirement, but bankers made a killing. And now they have a new plan which involves bringing kids into the market.
Market Watch reports:
The growth comes at a time when, experts say, kids are more likely to be unbanked. There aren’t as many kid-specific savings accounts from big banks as there were a few years ago, says Greg McBride, senior financial analyst for Bankrate.com. Most financial institutions aren’t interested in attracting underage savers. “The banks don’t have a shortage of cash; they have a shortage of revenue,” says Dennis Moroney, a director of research at Tower Group, a consulting firm.
Kids are just another market that banks are now trying to tap into. Many of the online kid accounts tout the parent’s ability to easily give allowances online or monitor spending, and although that sounds pretty innocuous, everyone would do well to remember how bankers sold all 401ks as safe as cash when they were introduced.
Does that mean that your child shouldn’t have an online account? Not at all, but understand that it is an online bank account, and check to make sure that it’s insured. Wouldn’t want your little one losing all of his or her piggybank money because a wealth management firm goes belly up.