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Volume 6, Issue 4, 2006   Federal Reserve Bank of Dallas

Kids Bank Encourages Early Saving in Fort Worth

Three years ago, representatives of Unity One Federal Credit Union approached Margarita Garcia, principal of Washington Heights Elementary School in Fort Worth, with an idea that would change the way students view money and saving. Unity One proposed that the school host and help administer a "Kids Bank," located in the school and staffed by students, for students.

Today the Kids Bank is prospering, and children are learning that saving is the key to wealth accumulation. The students at this north Fort Worth public school, where 92 percent of the students are on free or reduced-price lunch, have embraced the program, with well over 60 percent participating.

School administrators hope that the savings accounts will encourage students to succeed through high school and go on to college.

The program has another important benefit. The students, 98 percent of whom are Hispanic first- or second-generation immigrants, can pass on this basic knowledge of the U.S. financial system to their parents, who often are unbanked.

Located beneath a main stairwell, the Kids Bank has a work area with teller windows and a computer station. Its building façade is a reproduction of the local Unity One.

Garcia says her students are taking ownership by becoming depositors. They also are eager to serve as bank tellers—a status symbol among the students. Not only do the children love the social interaction of working at the Kids Bank, they also have come to understand the fundamentals of how a financial institution functions, the importance of customer service and even basic report generation.

Unity One invested $1,000 in the Kids Credit Union software; the school uses a donated computer to process deposits. Accounts are free and non-interest bearing. To withdraw money, students must give the principal a compelling reason.

Deposits have grown steadily, to a total balance of over $10,000 today. Some "supersavers" have accumulated deposits of over $800.

"The students can begin an account with as little as 10 cents," says Garcia. "They get so excited when they see their investment grow." When the students graduate from elementary school, they can transfer their account to any local financial institution.

Garcia believes the program has even helped increase attendance. "The kids want to participate. They often speak of attaining their future educational goals with their deposits," she says.

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e-Perspectives, Volume 6, Issue 4, 2006

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Roy Lopez Send an e-mail
Community Development Specialist
The views expressed are the authors' and should not be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System. Articles may be reprinted on the condition that the source is credited and a copy is provided to the Community Development Office.

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