Bank saving accounts for kids is becoming popular in India now a days. Let’s delve into the details of its requirement and benefits in this article. Savings is a habit which is beneficial for all the age groups which can be brought to use from childhood itself as it can make them aware of its functioning and the overall necessity.
Why Bank Saving Accounts for Kids Is Required?
Hence, in the overall world, many schemes are available for the kids, which allow them to have a bank account at a very tender age. Small children used to keep the money in the piggy bank out of curiosity, but they didn’t know that keeping the money like this has no future as it is kept at home.
Taking the idea from these types of examples, the bank savings account for the kid’s topic came up where parents can take care in the first place by fulfilling their child’s need or making any further investments. This is in trend nowadays as parents want their small kids to learn to be equipped, with the knowledge of how to remain financially sound, how to manage the money even though less money is there and the most important reason being how to save it for future purpose.
It is like a small game plan which attracts the kids below 18 years of age to see how the money grows with time. Seeing this a kid can learn and take up as to how money invested by them is in good hands, and with time, it will hold a good place in the market. Generally, adulthood is the age when we start learning about how to manage our own money and have a balance in lifestyle.
But if it is started with the kids, they can get used to it and gain the experience. At the same time, it understands the essence of nourishing the hard-earned money for a bright future. Hence, it is the best way to save money starting from the time they are born as it is never too late to start saving and this is one of the methods to make them responsible and disciplined from a young age.
Some Of The Popular Bank Savings Account For Kids
Many banks have come up with the necessary guidelines under with they can allow the kids savings account to be opened:
Pehli Udaan
The State Bank of India has come up with this innovative approach for the kids where the age of the kid must be from 15 to 18 years. It can be accessed by the minor itself hence a lot easier on behalf of the kid. The minimum balance option is not there, and it comes with necessary features and benefits like cheque book and digital services.
Pehla Kadam
This is also an initiative from SBI end, especially for the kids but for the age below 18 years. Here the kid does not have the flexibility to hold the account on own hence, they are the primary holders keeping their guardian in the secondary position. There is no need for a minimum balance between operating the account and the features available like that of Pehli Udaan.
My Junior Account by Kotak Bank
A specially designed account where the long-term investment can be made as savings for the future of the child. It offers an interest of 6 percent per annum on this junior account with a ten year recurring deposit and investment plan to safeguard the child’s needs. It has come up with some of the reward engaging programs where the kids can enjoy as well as win vouchers to build up their confidence to face the world.
Young Stars and Smart Stars Account
The ICICI Bank offers these two dynamic accounts, but it can only be opened if the parent already has an account in this bank and in case they do not have it then both the parent and the child’s account can be opened simultaneously. The Young Stars account can be opened for the kids with age group starting from day 1 to 18 years with the monthly average balance being Rs 2,500. Whereas, the Smart Stars account the children above ten years of age can open and take care of the account all on their own.
Kids Savings Account
It can be opened for those individual’s kids who already have a savings account with HDFC for a minor below 18 years of age as per the guidelines for some necessary action every month. The minimum balance should be maintained at Rs 5,000 for a minimum of 1-year span time. There is a free education cover facility of about one lakh rupees in case of tragic situations. It provides ATMs and debit cards only with the parent’s permission to kids between 7-18 years ago. The minimum balance which can be spent is Rs 2,500 only at ATMs and around Rs 10,000 at merchant locations each day. And once the account balance becomes more than Rs 35,000, it will automatically get transferred to a fixed deposit of one year for the child’s future referral. It also comes with the advantage of paying the bills and stopping cheque payments just via an SMS.
HSBC Junior Premier Account
One can open a kid’s account with HSBC only in case they are an HSBC premier customer which comes in as the priority. The kids can be provided with a supplementary credit card in case they are below 18 years of age and a platinum card for kids above 16 years. It also comes with some of the outstanding benefits like offering overseas educational benefits, encashment at emergencies and secured global networks. They have also provided the parents with the alert receiving messages in case of any withdrawal by the child and provide statements of the transactions done by them every month.
Many such banks and organizations are coming up with more and more projects to nurture the future of our nation hence it is on our part as a responsible citizen to take up these advantages and make the kids so for a secured future.
Benefits Provided on a Kid’s Bank Savings Account
The main benefits of provided on kids bank saving account:
- These children get introduced to the world running at a fast pace where they can understand the proper utilization of money in the day to day life with the minimal risk as everyone is there to guide them in this procedure.
- Kids find piggy banks interesting, so this is like having a bigger one with the assurance that the money is in safe mode and one can earn the interest on it, so it is like a lifetime achievement.
- It is useful in those cases, where if a sudden tragedy strikes in a family or with the guardian the insurance cover offering free education, comes to act as a backup for establishing the future of the kid.
- Only in those cases, ATM cards will be provided if there is procedural permission from the parents.
- In this world of digitalization, there is a mobile banking safe option to check, pay all through SMS and on top of that free net-banking is available. But there is a specified limit for any such investment, and once it reaches that point, it can be taken forward for any other investments for the kid.
- The most important benefit is that the parents can monitor their child’s actions step by step and provide them with guidance whenever they are in need of it.
Conclusion
Money is crucial as without it, one cannot survive for long. Hence, there should be a pathway created for the new generation where they can learn, analyze, get to know new things and then get started with the savings account. As for the future, it is a friendly option. Because we never know when money is needed urgently, and this is the time the bank savings option acts as a buddy and serves the purpose.
Read also: Know About Fixed Deposit
