On June 17, 2009, Senator Blanche Lincoln announced her intent to introduce Child Account legislation this fall, ‘Adding the Kids’ to the Nation’s savings agenda. The Child Accounts Act of 2009 would create savings accounts for every child born in the United States. Such a system of universal Child Accounts would give every young adult a financial spring board to launch themselves into a more financially secure life and would help to develop a more financially secure society
“Saving, like every good habit, is best learned early,” Lincoln said. “Teaching our children the importance of thrift will go a long way in preventing them from facing an insecure financial future. Child accounts can provide the ‘hands-on’ tools largely recognized as necessary to improve our nation’s financial literacy and build a new generation of financially informed consumers. It’s time to add the kids.”
Lincoln’s Child Accounts Proposal Summary:
At birth, every American child will be provided with a $500 Child Account Contribution Certificate from the Department of the Treasury.
Parents will open a savings account in the name of the child and deposit the certificate at participating financial institutions.
The standard Child Account will have a simple design, one basic investment fund structured for an 18-year investment horizon, and limits on account fees and expenses.
Up to $2,000 can be contributed annually by the child or on behalf of the child.
Low- and moderate-income families will be encouraged to save through matching contributions.
Account funds will be locked up until the child reaches age 18. At that time, the assets can be used for any purpose.
Senator Lincoln was joined in introducing this bold new initiative by David White, President and CEO of The Children’s Mutual, William Bynum, President and CEO of Enterprise Corporation of the Delta and the Hope Community Credit Union, Angela Duran, President of the Southern Good Faith Fund, and Lisa Mensah, Executive Director of the Aspen Institute Initiative on Financial Security.
