Getting in Front of Youth: Open Their First Account

It’s the adult members of Gen Y that receive much of the youth-centric attention, but great opportunity lies in attracting potential members who are under the age of 18.


The topic of 'Reaching Gen Y' is everywhere, and rightly so, since attracting younger members is absolutely critical for the continued survival of the industry. But much of this coverage centers on reaching Gen Y members who are age 18 or older. It's very easy to ignore the younger end of the spectrum who are enrolled in K-12 education and have no substantial income. Reaching young, pre-adult members should be a topic that receives equal or greater coverage as adult Gen Y members. Nearly 25% of the US population is under the age of 18. Focusing on attracting these children today can save your credit union a lot of leg work in the future.

Aim for the Parents
How many 10-year-olds out there do you see talking about what rate they are getting on their high yield checking account or CD? I can't think of any either, that’s because financial management decisions don’t come close to registering on their radar.

The vast majority of younger individuals open their first accounts under the close guidance of their parents. In fact, 82% of children will have an account at the same financial institution as their parents [1]. Your credit union simply can’t afford not to capture the children of existing members. Unfortunately, opening up an account for their children is not exactly top-of-mind for busy parents. Some type of effort from their credit union must be made to prompt parents to act. This can be as simple as a friendly reminder piece of collateral every few years, organizing an annual 'youth week' at the credit union, or enticing them with a small incentive or a good rate on specific youth products.

Once you succeed in opening a child’s first account or entice their parents to open one on their behalf, half the battle is already won. You can then choose to engage the younger member periodically through a variety of proactive steps. If nothing else, send a happy birthday notification with small goodie every year. Any type of effort will keep you on their radar, and once they get that first summer job and need somewhere to cash or deposit that paycheck, they will know where to turn. 

Knowledge is power
Financial literacy is no longer taught in the school systems, and the majority of individuals who were born after 1980 have never received any type of formal financial education in this crucial area. In 2006, 6,000 high school students from across the nation completed a survey that evaluated their basic financial knowledge…and failed miserably. The organization that developed the survey, Jump$tart Coalition for Personal Financial Literacy, concluded that 62% of the students "simply have no insight into the basic survival principles involved with earning, spending, and investing."

The Jump$tart Coalition also found that many youth lack the necessary skills required to adequately manage their finances and this lack of education has very serious consequences. As someone born in the 80s myself, I can personally attest that this is a grave problem for many young people today. I actually have friends who are currently facing the prospect of bankruptcy because they made some poor choices that could have easily been avoided if they ever received basic financial education.

I believe that student-run branches are one of the best methods available to teach financial concepts to kids. These in-school branches reach children in their environment, completely integrating them and their peers into the financial process, and allowing them to 'learn by doing'. Having a presence in their school every day will make more of an impression than advertising dollars ever could ever hope to achieve.

Other credit unions have found success by offering a complimentary $100 deposit into a savings account as an incentive for young individuals to complete a series of financial education classes. Financial education is actually an area where credit unions can get in front of kids and have a tangible affect on their lives. Such initiatives are also likely to make a lasting impression, because they are not currently offered by other organizations.

It becomes increasingly difficult to attract potential members once they establish relationships with other financial institutions, and it is certainly easier to retain existing members than to attract new ones. These drivers should provide all the more reason for credit unions to make an effort to specifically target children. Now is the time to focus on forming relationships as early as you possibly can!

[1] Brass Media
[2] Jumpstart Coalition for Personal Financial Literacy, 񓟶 Personal Financial Survey of High School Seniors."




Aug. 18, 2008


  • The author makes some excellent points. It''s hard to keep a long term perspective in light of the current margin squeeze.
  • Dane, Thanks for the article. And if you drill down deeper where the parents are concerned, you''ll find that boys and girls look more to their mothers for advice than the fathers.
    Roger Conant
  • Excellent points - but here''s a very simple fact to promote to kids of all ages. Do the math. Give kids (or grand/parents) an amortization schedule for tiny savers. Show them how saving weekly or monthly from their allowance or gifts results in FREE money. If they save $10 every month for 10 years - how much free money is that? Too long? Try 3 years or 5 years. The point is to show them that they won''t miss the money they save at all. They put it into the credit union and let the credit union nurture it for them until it grows a lot bigger than it is. It won''t work for everyone, but maybe it will for some.