Plan your child future with the Kids Saving Account
Not many people grow up learning about how to operate a bank account. The different terms, the bank’s rules and regulations can all get very confusing for people who have not had any exposure to a bank in their childhood. When it comes to financial literacy, the earlier these concepts are made clear to a child, the faster they adapt and learn them. To inculcate an understanding of banking accounts, many banks have a Kids Saving Account that can be operated by the child.
What is a Kid’s Saving Account?
A Kid’s Savings Account is a type of account that a child can operate by themselves. A child is anyone below the age of 18 years. Some banks allow children to jointly operate a bank account with their parents till the age of 10 years and from 10 years to 18 years, the child can operate the Savings Account by themselves. The Kid’s Saving Account has all the features of a Regular Savings Account. An ATM cum Debit Card is provided to the child with daily withdrawal limits. The child is also allowed to spend a certain amount of money at merchant locations.
However, the Kid’s Saving Account has to be linked to the parent’s account. This is to ensure there is some balance in the Kid’s Savings Account. In case of any shortfall, the money is transferred from the parent’s account to the child’s account.
The Kid’s Saving Account also has other features associated with a Regular Savings Account such as passbook facility, email statements, balance inquiry at branches etc. However, a Kid’s Saving Account becomes inoperable once the child turns 18 years of age. At that point of time, this account has to be converted to a Regular Savings Account and meet all the rules for that account.
The advantage of allowing your child the freedom to operate their own account is that it lets them get familiar with banking terms and how the account works. This information is invaluable once they grow up.
Secondly, by operating their own account and Debit Card, the children learn that the money in an account is limited. They are allowed to make their own withdrawals and spend money at merchant locations, but if the money in the account gets depleted, or finished, then they have to ask their parents for more. As such, this inculcates the value of money in the child. Learning that money is limited and that one has to manage all the spends and wants from that is one of the best learnings from this account. They can also learn additional lessons in financial planning for their future. Knowing this can help the child plan his financial future once he turns into an adult.
Once the child turns into an adult, this Savings Account can be converted to a Regular Savings Account.
How to open a Savings Account for kids?
This account is fairly simple to open. The account opening form will have to be filled up along with the KYC details. In this case, the age proof of the minor along with the parent’s Aadhar and PAN card will be required to open the account.
So, take the first step to inculcate financial lessons to your child. Open a Savings Account for your child today.
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* Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.