Florida CU Creates Savings Product For Kids In Foster Care

ORLANDO, Fla. - Central Florida Educators FCU has created savings accounts to teach local foster kids how to save and learn about finances, a move the CU hopes might help grow its membership in the process.

"We're looking at it as a real plus. We started out as an educational federal credit union. A lot of things we do are based on the education community," Melbourne said.

The new savings accounts won't need an adult co-signer to open and will be accessible with an ATM card for withdrawal only. Envelope deposits won't be permitted to prevent any temptation of fraudulent deposits using empty envelopes while young savers are learning about financial education. Each account will have a $100-per-day withdrawal limit but the ATM cards can be used at ATM machines throughout Central Florida. When kids reach 18 years old they are then granted full account status with full-checking services.

"When they're of age, they'll have some funds and know what to do with it," Melbourne said. "We try to let them build up credibility before giving them full access. A lot of them have trouble getting accounts because they've never had them."

CFE VP of Operations Linh Dang said each account is set up to take direct deposit, and can accept $66 allowance checks from the State of Florida foster care system. State law requires foster parents to be issued the checks, Dang said, but that foster children need direct access to the money. CFE will market the savings accounts through Circle of Life and local foster care agencies. After launching the accounts last December, Dang said the first phase of the program is media exposure, which started with a mention in the Orlando Business Journal on the second day of the new year.

Melbourne said the new savings accounts will serve area kids in need, teach them the habit of saving their money and also bring in future members. Contrary to much of the credit union industry, Melbourne said CFE FCU's membership age is actually decreasing. Melbourne said "time was the only investment" to jump start the program, requiring only staff planning time, organization and interaction with Circle of Life staff.

"I think it's a program that could really take off. It was an easy, inexpensive program to start," he said.

CFE FCU serves 114,000 members with $1.04 billion in assets. Circle of Life staff couldn't be contacted for this story.