The lessons that elementary school students learn about saving can have a lasting effect, according to a new study supported by the Treasury Department.

Fifth-grade students in Eau Claire, Wis., who completed roughly five hours of financial education retained the bulk of their knowledge one year later, according the study conducted by the nonprofit Corporation for Enterprise Development and backed by the Treasury. Of the 272 Eau Claire fifth graders who participated in the study, those who received financial education in spring 2012 raised their average score on a quiz testing their knowledge from a baseline of 5.65 out of 13 to 7.93. One year later, their average score had dipped only slightly to 7.88.

"We found it really exciting and promising that those knowledge gains lasted a year later in Eau Claire," says Kasey Wiedrich, a senior research manager at CFED who worked on the study. "We didn't expect to see such positive persistence in those findings over time... We think [the results] are promising in perhaps thinking about a long-term impact on students."

The CFED's wide-ranging study examines the effects of financial education and in-school banking programs on roughly 1,400 fourth and fifth graders in Eau Claire and Amarillo, Texas, during the 2011-2012 and 2012-2013 school years. The financial education program was adapted from the Council on Economic Education's financial curriculum. Teachers gave lessons on topics like "what is a savings account and what are the different ways to save," Wiedrich says, along with introducing students to basic financial concepts like opportunity cost.

Meanwhile, two local lenders — Royal Credit Union in Eau Claire and Happy State Bank in Amarillo — ran in-school branches that allowed students to open savings accounts, make deposits and work toward savings goals.

"The banks try to get kids excited about saving," Wiedrich says, by offering small prizes like pens and pencils when students put money into their accounts. Not only are students with access to in-school branches more likely to sock away cash, they also prove more willing to learn about finances in the classroom, according to the study.

The study suggests that the one-two punch of in-school banking programs and financial education may be able to shape future behavior, according to Wiedrich.

The programs "come at a point in these students' lives where education and access to accounts would hopefully improve financial behavior later in life," Wiedrich says. "This is positive evidence of ways to increase financial capability."

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