×
Close
Personal Online Banking
All personal banking clients, please enter your online credentials here:
e‑Treasury Business Banking
Log in
Safeguarding your online banking sessions is our top priority. For information about how you can help protect your online banking sessions, or if you need additional assistance with your e-Treasury log-in, please contact Client Support at [email protected] or 855.274.2800.

Download our e-Treasury Secure Browser

Business Online Banking
If you need assistance, please contact Client Services at [email protected] or 855.274.2800.
e‑Treasury
Log in
Safeguarding your online banking sessions is our top priority. For information about how you can help protect your online banking sessions, or if you need additional assistance with your e-Treasury log-in, please contact TM Service at [email protected] or 212.575.8020.


Download our e-Treasury Secure Browser

Download the Sterling e-Treasury Token Client


Business Online Banking
If you need assistance, please contact Client Services at [email protected] or 855.274.2800

For optimal viewing experience, please use a supported browser such as Chrome or Edge

Download Edge Download Chrome

The Best Investment: Teaching Your Children to Save and Invest

Published on April 16, 2025 | Webster Bank

A 2022 Gallup Poll found that 58% of all adult Americans own stock. The top 1% owns more than half the total amount invested among those who own stock.1 Making investing possible for your children, nieces, nephews and other loved ones may be the key to improving their financial future and getting them off to a good start in adulthood. Here are a few ways to help your children develop good habits regarding saving and investing.

Start Them Saving Early

If you start your children early with good saving habits, these habits may continue for the long term. Help your children understand that they may work to earn money—from doing chores around the house to babysitting or mowing lawns—and use this money to save for major purchases. You may provide additional incentives to save by offering to match them, dollar-for-dollar, in savings to purchase a big-ticket item.

Explaining the Benefits of Investing

Once your child understands the benefits of saving, it is time to introduce the advantages of investing. One key concept is that of compounding returns over the long term. With this idea, a few dollars, invested early, may provide nice returns when invested in income-producing assets. The younger your child is when they begin investing, the more time they have to compound returns and recover from potential losses. With a decent investment strategy, they may develop good habits and independence as adults. Investing might help your child learn to take managed risks, practice delayed gratification, and set meaningful future goals.

Research Investment Accounts for Children

After your child gains an interest in investing, a question may arise—where should these funds be placed? There are a few options depending on the child’s income and assets.

A custodial Roth IRA allows your child to invest their earnings, post-tax, into an individual retirement account. These funds may grow for years, pay for qualified educational expenses or help fund their retirement.

A custodial trust account, such as a UGMA or UTMA trust, may be opened for the benefit of a child. The person who opens the account is the custodian who remains in charge of the assets until the child becomes a specific age.

A brokerage account is the most flexible type of investment account in terms of deposits and withdrawals. Your child may add funds to the account and select their investments from the various available options.

Because investing may come with some tax consequences, particularly for minors claimed on others’ tax returns, it is important to talk to a financial professional before opening an account for a minor. Your financial professional may help you manage potential tax pitfalls and recommend an appropriate account for your child.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax-free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #1-05359966.

Footnotes

1 What Percentage of Americans Own Stock?
https://news.gallup.com/poll/266807/percentage-americans-owns-stock.aspx

Related Resources

Webster InvestmentsArticles
Ask Your Father These Questions on Father’s Day
And see how your life plan should really become your financial plan It’s an old question: Can money buy happiness? Up to a point, yes. But without deep personal relationships, more dollars don’t make you happy. On Father’s Day, consider talking with your dad about happiness and satisfaction. And if your father is no longer […]
Webster InvestmentsArticles
Last Minute Considerations for the FAFSA Deadline
For many, the expenses of college or technical school can be overwhelming. But, with financial aid programs, tuition, room and board, books, and other college-related costs can become more affordable. To determine if your student qualifies for financial aid, you must fill out the Free Application for Federal Student Aid, or FAFSA, by the deadline. […]
Webster InvestmentsArticles
How a 529 Plan Can Benefit You: Education Funding for Your Child
A 529 Plan, also known as a “qualified tuition plan,” is an investment vehicle that offers numerous benefits to parents seeking to save for their children’s future education. 529s are versatile and provide significant advantages that may help ease the financial burden of funding a child’s college education. Understanding 529 plans Named after Section 529 […]
Connect With Us
Learn more about Webster products, services and the communities we serve.