Various banks offer a variety of attractive features on a Savings Bank Account for kids. If you are planning to open an account for your child, consider these important points.
Saving is a crucial habit which needs to be inculcated from a young age. Gone are the days when parents introduced saving habits in their kids by buying them piggy banks. With the Reserve Bank of India allowing minors between the age of 10-18 to open a saving bank account, kids can experience and understand the banking process at an early age.
An account for minors (below 18 years of age) can be opened and the usual facilities of depositing and withdrawing money can be availed like a normal Savings Bank Account.
Opening a bank account is like making a contract. You agree to follow the terms and conditions put forward by the bank. As a parent, you need to be a joint owner of the account in order to get all the technicalities done. A child who is 10 years of age or above is allowed to operate the account on its own. Children above 10 years of age are given chequebook and a Debit Card to withdraw money. When your kid reaches the age of majority, i.e. attains the age of 18 years, you can hand over the ownership to him/her.
If you are planning to open an account for your kids, here is a list of a few things to consider:
Look For A Good Option
Most banks offer different features in a minor savings account. It is wise to make a comparison of the features offered by different banks before opening an account. Do consider options like Kids Advantage Account of HDFC, Young Stars Account by ICICI, Youth Banking Accounts by Union Bank of India, PehlaKadam and Pehli Udaan by SBI etc to make a final choice.
Know Your Bank’s Minimum Balance Policy
Most of the banks require customers to maintain a certain minimum balance. Hence, do check the bank’s minimum balance policy well in advance to avoid penalties.
Do ask the bank officials whether they offer personalised chequebook for kids and if they do, teach your kid how to use it.
Monthly Bank Statement
Banks provide the facility of monthly bank statement for children accounts as well. It will help you in monitoring transactions. It will also help in teaching your child the importance of tracking any kind of transaction- credit or debit.
Internet banking facilitates customers to operate their account from anywhere. However, for a kids’ Savings Bank Account, it is important that this facility should be availed under strict parental guidance. Any kind of password for banking transaction should not be shared with minors for safety.
Mandatory Account Of Parents
Banks that offer the facility of opening kids account want the parents or guardians to mandatorily have an account with them. It would be wise to open an account for your child in your existing bank. You will save yourself from the hassle of managing multiple accounts at different locations.
Do gift your kid an account of his/her own on their upcoming birthday to inculcate a habit of saving early. Be a smart parent and expose your kid to some practical knowledge that is bound to help them forever.
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