School Banking Makes Sense

School banking.

 When I grew up in Philadelphia in the 1950’s, The Philadelphia Savings Fund Society or PSFS had a school banking program. Once a week a representative from the bank would come to our school to collect deposits and record them in our savings passbook. PSFS started the program back in 1923 and was the first banking institution in the US to do so.  The goal was multi-fold.  On one hand, the bank tried to teach students about thrift and the importance of savings. They would learn how savings could grow with the addition of interest added on at the end of the year. On another level the bank was cultivating future customers who would ultimately open Christmas Club accounts, apply for mortgages for their first homes and become life-long customers.

 Philadelphia was not the only area to encourage student savings by opening a school bank program .The state of Louisiana has a state wide school banking program sponsored by the Louisiana Bankers Association. Along with the about for students to make weekly deposits and see their money grow, there is a 100 page teachers guide that is useful in teaching elementary students about money. The curriculum has be accessed and downloaded at http://www.lba.org/files/bank%20at%20school1.pdf.

In 1992 the state of Delaware established a bank at school program. The original program was started in conjunction with the Delaware Trust Company and the state had to give permission to operate the“branches” in schools. *(see http://www.bankatschool.com/index.html).

Recently in Naples, Florida, The Suncoast Credit Union began operating in area schools. Students act as “tellers” and accept deposits from fellow students.

In Massachusetts, the State Treasurer initiated a program entitled “Savings Makes Sense.” It was designed as a way to teach school students about money, credit, banking, taxes and investments. The participating bank is Country Bank for Savings in Ware, Mass. They even have a mascot- Buck the Dog- who encourages students to put money in their passbook savings accounts.  For more information about this innovative program, go to http://www.countrybankforkids.com/teachers.htm.

In Virginia, the Bank of Lancaster sent every student in the middle school a one dollar bill and encouraged them to open a school savings account. One dollar is the minimum required to open an account. Students were then invited to apply for “jobs” as tellers and branch managers. The school bank is open one day a week and parents volunteer to help accept deposits. This program was established in conjunction with the Virginia Bankers Association and the American Bankers Association. Please see http://www.bankoflancaster.com/school-banking-programs.

Please note that all banks mentioned are FDIC insured.

Starting a school bank in your school is a great way to get students to participate in the learning about finance and economics. Hopefully, it will instill the importance of thrift and savings and lower the risk of having an economic meltdown like the one we are presently trying to steer out of.

The personal savings rate in the US was recently pegged at 4.9%, the lowest since October 2008. It has been higher as well as lower in recent years. The current decline has been caused by the Recession. People who are out of work can’t save money. The other problem is spending. Apparently Americans overspent during the holidays creating a further depression of the savings rate.

As you might see, establishing a school bank is timely in several respects. If your school doesn’t have one, you can be the catalyst to start one!