Not many people learn how to manage a bank account as they grow up. People who have never dealt with a bank before may find the many terms and the bank’s rules and regulations to be highly confusing. The earlier financial literacy concepts are explained to a child, the easier it is for them to learn and apply them. Many banks provide Kids Saving Accounts that can be controlled by the child in order to foster an understanding of banking accounts. Your children’s likelihood of success in the future is increased if they learn about money management at a young age thanks to a little savings account.
What is a kid’s savings account?
A kid can manage a savings account on their own, known as a kid’s account. Everyone who is younger than 18 is regarded as a child. Some banks permit kids to jointly manage a bank account with their parents up until the age of 10, and from 10 years to 18 years. Every function of a regular savings account is available on the kid’s account. The child is given an ATM/Debit Card with daily withdrawal limits. Additionally, the child is permitted to make purchases from merchants up to a set limit.
Basic features
Savings accounts have a minimum balance requirement, even for children. Additionally, the account has a maximum balance, after which the bank would often deposit any additional funds (which exceed a specific limit) into a Fixed Deposit account in the minor’s name for a year.
The child will also receive an ATM/debit card for access to the account, but it will have a lesser financial limit than a typical Savings Account. By doing this, you can ensure that the child has access to money when they need it but doesn’t misuse it. You will also receive notice of any transactions the minor makes as you are a joint account holder.
The Kid’s Savings Account must be connected to the parent’s account, though. This is to guarantee that the Kid’s account has some money. Money is moved from the parent’s account to the child’s account in the event of a shortfall.
The Kid’s Saving Account also includes services similar to Regular Savings Accounts, including the ability to keep a passbook, email statements, in-branch balance inquiries, etc. A Kid’s Savings Account, however, is no longer usable after the child is 18 years old. At that point, this account must be changed into a Regular Savings Account and follow to all of that account’s requirements.
Steps for opening an account
Although the precise stages may differ significantly from bank to bank, in general, the following steps can be used to open a bank account:
- Make a choice regarding the type of bank account you want to open. Depending on their needs, consumers can choose from a variety of accounts offered by various banks. The savings bank account is the most typical form of account.
- Compare the minor savings accounts that various banks offer. Use savings account interest rates, facilities, and accessibility as the basis for your evaluation.
- Get ready to apply. Fill out an application for a minor savings account with the legal guardian listed as a joint owner and the child listed as the primary holder.
- As proof of the child’s age, you may need to produce the birth certificate. The child must be under the age of 18. This is necessary to verify your link with the minor as well as to prove your age.
- You will be granted a debit or bank card for your child once the procedure is finished and the supporting documentation has been examined. You must contact a toll-free number or activate it online.
One of the best gifts you can offer your child is a savings account. Like other savings accounts, the account accrues interest and increases in value daily. By the time your child turns 18, the investment has grown significantly, reducing his or her financial burden.
