Thrift makes a comeback: since overextended credit and mortgages have currently become unfashionable for parents, the time is right for banks to review and reinvigorate their programs designed to encourage youth to save money and manage their finances responsibly.

• Author: Kelly, M. Kathryn
• Position: Children's Savings Accounts

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The days of cheap and easy credit from nonbank lenders are over. However, traditional banking is still in style, and old-fashion thrift habits are making a comeback in households across the country. This might be an opportune time for banks to introduce a youth-oriented savings product or to enhance an existing one. Children's savings accounts (CSAs) encourage young people to build responsible financial habits.

CSAs can be successful in any market from large city to small towns. Just ask Jake Silker, personal banker and marketer at Foster Bank in Chicago. Last year, Silker took a fresh look at an existing account for minors and rebranded it the Smart Club, which stands for Saving Money Adult Readiness Training. "It catches attention and makes our point," Silker explains.

The bank's goal: Promote saving among all income levels, cultivate an ongoing habit and help young people become future wise money managers. To that end, Silker says, the bank set no minimum deposit so "any child with a few pennies" has a safe place to watch his or her money grow. The campaign targeted existing customers across its 11-branch network. Foster Bank's sincerity resonated with older customers who spread the word among young family members. With assets of $520 million, the bank was pleased to increase its youth accounts by 2,592 and its deposits by more than $1 million since rebranding the accounts. Accumulating more than 2,000 new names permits Foster Bank to build relationships with these savings customers' families.

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How do you get started?

Below is a series of steps that a bank can take to implement a youth-savings program.

* Set clear goals.

Consider what you want to achieve with your deposit accumulation program. Cultivate new customers? Strengthen existing relationships by providing another opportunity? Gain visibility for your bank? Consider how you can realistically measure progress for the results you seek. Once you've drafted your goals, research existing programs in your market area and beyond to determine the needs of your target market and what's currently available. "Creatively borrow" from similar offerings and build upon features you like best to develop a program uniquely your own.

The Bank of Guam, Hagatna, Guam, set out to grow its customer base and increase core deposits. "Competitive rates and a simple program" work best, according to Jackie Marati, senior vice president and marketing administrator of the bank, which has just over $800 million in assets. Its Pacific Express Kids Club requirements are simple: no minimum...