Victoria Is Banning All School Banking Programs From 2021

Wave goodbye to Dollarmites.

If Dollarmites was something you looked forward to in primary school, get ready to have your childhood dreams crushed 'cos the Victorian government is banning all banks and financial institutions from delivering school banking programs next year.

Yep, that’s right. Your younger siblings and cousins are going to miss out on this integral part of the Aussie school experience.

As it turns out, this isn’t as devastating as you might think. The Victorian government is banning the program because they’re essentially unfair to young people and they're not actually all that good at teaching us how to save our money correctly.

The Royal Commission into the Banking and Financial Services Industry in 2019 showed how important financial literacy is today, which was then strengthened by the economic fallout from the pandemic.

While school banking programs claim to help kids learn how to save and use a savings account, in reality, there is very little evidence to support that claim.

On top of this, the way these programs usually work is by rewarding young students with small gifts or prizes like stationery, which is essentially just the banks' way to lure children into becoming loyal customers.

The Victorian government believes that banks are essentially taking advantage of young people so that they can win more customers from as young as possible.

"Interest rates offered through school banking programs are unfairly low, resulting in students missing out on compounding interest, one of the key benefits that comes with saving money and banking," the Victorian government said.

"There have also been reports around the inappropriate promotion of credit cards to primary school-aged children."

The changes come after many concerns raised by students, teachers and families about programs like Dollarmites.

CHOICE also previously called on schools and parents in 2019 to ditch the banking schemes after banking regulator ASIC found that there was almost no evidence of school banking being helpful.

Instead, the Victorian government plans to introduce new teaching resources that give students information and tips on savings, taxation and how to identify and avoid scams (something I bet we all wish we had some pointers on).

Minister for Education James Merlino announced the move on Sunday, explaining how Victorian students deserved better.

"Victorian students deserve high-quality financial literacy, free from commercial interests—that’s why we’re banning financial institutions from delivering school banking programs," he said.

"The Victorian curriculum sets our expectations for financial literacy and that must be our focus. It is time to draw a line under this issue."

The school bank ban is set to start from Term 1, 2021.