In these times, it is very important for a child to know basics of personal finance. Teaching your child through live examples is a better way to ensure long lasting learning and retention. Recognizing this, banks have come out with a different type of saving account specially for kids. They can operate this account and learn the basics about a savings account.
There is no need to wait till your child is 18 years before opening one. You can open zero balance account and give your child the responsibility of managing this account.
Features of Kids saving account:
The account is a zero-balance account which means there is no need to maintain a set balance in it. The account is linked to the parent or guardian’s bank account. In case the balance is zero, funds can be transferred from the linked account to the kids saving account. However, a few banks may insist on a minimum balance. So, it is better to check the rules before opening this account.
The account comes with a free debit card that the child can use to make cash withdrawals from ATM to swipe at merchant outlets. The debit card comes with a shopping limit, which means that your child won’t be able to spend more than the limit.
Banks also provide free cheque books, free passbooks, free email account statements. The account holder can also use internet banking and mobile banking. It is also possible to pay bills through this account.
This account is only in operation when the child is a minor. Once the child is a major, a regular savings account must be opened. It is possible to convert this zero-balance saving account into a regular saving account by filling up a form.
Banks may also offer a sweep in facility where funds above a particular limit are put into a fixed deposit. This ensures the savings account earns higher income.
Most banks require an auto debit facility to transfer funds from the parent or guardian’s account to the kids saving account to maintain a balance.
Some banks also provide free insurance to cover the child in case of the parent’s death.
How to open a kids savings account:
It is possible to open online saving account in this case by filling up a form on the bank’s website. Considering it is the era of e-banking apps, you could open one via your smartphones as well. Else, visit the branch and complete the procedure.
The documents required for this account are:
There is no need to wait till your child is 18 years before opening one. You can open zero balance account and give your child the responsibility of managing this account.
Features of Kids saving account:
The account is a zero-balance account which means there is no need to maintain a set balance in it. The account is linked to the parent or guardian’s bank account. In case the balance is zero, funds can be transferred from the linked account to the kids saving account. However, a few banks may insist on a minimum balance. So, it is better to check the rules before opening this account.
The account comes with a free debit card that the child can use to make cash withdrawals from ATM to swipe at merchant outlets. The debit card comes with a shopping limit, which means that your child won’t be able to spend more than the limit.
Banks also provide free cheque books, free passbooks, free email account statements. The account holder can also use internet banking and mobile banking. It is also possible to pay bills through this account.
This account is only in operation when the child is a minor. Once the child is a major, a regular savings account must be opened. It is possible to convert this zero-balance saving account into a regular saving account by filling up a form.
Banks may also offer a sweep in facility where funds above a particular limit are put into a fixed deposit. This ensures the savings account earns higher income.
Most banks require an auto debit facility to transfer funds from the parent or guardian’s account to the kids saving account to maintain a balance.
Some banks also provide free insurance to cover the child in case of the parent’s death.
How to open a kids savings account:
It is possible to open online saving account in this case by filling up a form on the bank’s website. Considering it is the era of e-banking apps, you could open one via your smartphones as well. Else, visit the branch and complete the procedure.
The documents required for this account are:
- KYC documents of the parent or guardian, if the child is less than 10 years of age
- Date of birth proof for example, birth certificate
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