One of the best things parents can do to educate their children about finances is to assist them in opening a Bank Account. It is an excellent gift for a young child. It may seem silly initially to open an account for a toddler, but the reality is that this account will grow as they do through life’s stages. Starting a Savings Account in their childhood can help your child learn more about money management, future savings, and other areas of personal finance.
If you are receiving monetary gifts for them on your birthday or while you are on holiday, this account provides the perfect spot to deposit funds, keep them safe, and let them grow.
Reasons to open an account for your child
- Building savings goals
You can talk to your children about their savings goals by using Mobile and Internet Banking platforms to help them better understand how to use Online Banking, deposit cheques, and manage real-life transactions. Whether from an allowance, payment for completing chores, or a part-time job, find fun ways to incorporate value into their daily activities.
- Teaching money management
Teach the value of earning money by setting up a recurring transfer or allowance your child receives after a particular set of assigned chores. Before they know it, their hard work will have paid off. A Kids’ Savings Account may teach your child about compound interest, different types of financial accounts, and how to handle money in real life. It helps your child understand how a financial account works and better prepare them to manage Debit Card spending.
- Parents and guardians can monitor activities
Children’s savings can teach them to establish financial goals and make responsible decisions. Before selecting a bank for account opening, talk to your child and explain how it works. The parent’s or guardian’s signature is required to open a joint account. As the secondary owner, you can easily monitor their finances with instant notifications and alerts from the Internet and Mobile Banking applications.
- Attractive interest rates
After you open a Savings Account for your child through digital methods, you can rest assured of receiving returns at attractive interest rates. Your child can earn 3% to 3.5% interest on daily balances every quarter. Other benefits include a Personal Accident Insurance cover of Rs. 2 lakh for your child and a Visa Platinum Debit Card.
You can opt for customisation of the ATM or Debit Card linked to the Bank Account by adding a picture of your child on the card if they are over 10 years old.
What is the eligibility?
To be eligible to open a Minor Bank Account, your child should be under 18 years old. The parent should hold an account with the bank and submit some documents, such as the duly filled account opening form, a passport-sized photograph, proof of age, and address and identity proof.
