Wednesday, June 27, 2018

Posted On June 27, 2018 by Team iCynosure.

During the summer holidays, #PrincessHeer enjoyed the real-life role-playing activities at an interactive indoor theme park that helped her learn about careers, work and money. She slowly understood the financial dynamics as she completed each activity, realizing the value of money, earning and spending avenues and means to effectively manage it. At the end of the day, she headed for the banking activity at the theme park, where she first had to apply for a savings account and then deposit the money earned in it. As she completed the activity she turned around and asked me if she has a real bank account too.


Luckily these days, we don’t really have to wait until children turn 18 to open a bank account for them; and we had opened a savings account for Heer when she turned two. At that time banks offered an instant savings accounts for minors, as per the directive of the Reserve Bank of India. I believe every individual irrespective of their age should hold a savings account, however, parents have a few questions while opening a savings account for a minor. 

What is the right age for a child to have a savings account?
All banks offer joint ownership to parents while opening a savings account for a minor. This facility allows parents to operate and manage the account until the child turns 18, post which the minor account is converted into regular savings account that can be managed by the child on his/her own. Some banks also offer different types of minor accounts, one for those children below 10 years of age and another for those children between 10 and 18 years. 

Which features are available in a child’s savings accounts?
A savings account for a child is similar to a normal saving account, however there are a few features that are added in saving accounts for minors such as ‘No minimum Balance, ‘Maintenance Free’, ‘Better Interest Rates’ and fun features like ‘Personalised ATM cum Debit Card’ and ‘Personalised Cheque Books’. 

What protection is offered for a child’s saving account? 
A minor savings account is similar to normal savings account albeit a few tweaks. Some banks offer Personal Accident Insurance Cover as well as Lost Card Liability and Purchase Protection Liability that safeguards against unauthorized card transactions. 

Opening a bank account for a child enables him/her to build saving and inculcates good money habits. However, it is very important to teach children the importance of banking, and for that, it is imperative to take the child to a bank. Include him/her in opening an account that enables to familiarize with the environment and make him/her feel part of the process. Begin that perfect start to your child’s financial journey by opening a Children’s Bank Account today. 

Until next time, 
~ Heena

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