The topic is going to be more complicated to expound it in my own way. Well let me try to simplify as much as possible. We all love our children and pamper them utmost. Many parents give lot of gifts to their children and privileges in order to make their child happy. I completely understand this, the way the parents love and affection to their children. Even I did the same thing when it comes to my child.
Now a days children are smart enough to be independent and they are prepared to take the responsibilities from us. May be a month ago me and my friend had a discussion about grooming children and the topic channeled towards giving gifts, when I asked what was the greatest gift you ever give it your child, he was saying Toys ,Cars, travel etc.. The next question was ‘’ did you ever see your child using the gift more than a week or month ‘’, he replied normally my child use to play a toy for about a week .I immediately asked him ’’Did your child learned any lesson from the gifts?’ ’He questioned me’’ lesson from the toys’’.
Yes, Many of the parents are willing to give gifts as much as possible, but are we ever thinking how my child is going to learn a lesson from the gift which I suppose to give? Now you might be thinking that what this guy is trying to say ! I said to my friend why don’t you gift a Bank account to your child , he was confused and asked me,a bank account to a child? I said yes. A bank account helps train the routine of saving in children from their early stage and this is absolutely a great platform to absorb the bank operations .It might be the right time to set up their own bank account as we are living in a competitive world, they should know the things better.
As well as providing an indication into how banks are actually running,and the terms of credit and debit will help them to understand and manage their money effectively.At the same time this will create a place to invest their pocket money and birthday money.
Now you may be thinking that,is my child old enough to have a bank account? Kids saving account typically comes with a parent’s joint ownership.That mean either of the parent can be a joint owner to manage the finances until the child is ready to manage their own.Because of the setup,your child doesn’t require any age criteria typically but few banks says there is an age criteria of minimum 2 years to own a bank account.
THINGS YOU NEED TO CONSIDER FOR OPENING A KIDS SAVING ACCOUNT
Many banks are offering a kids saving account with many feature like no minimum balance(but typically require a few hundreds as a minimum balance),good rate of interest,ATM cards and online access etc.You can teach your children about the online transaction which is really important for them to understand their transaction and teach them about the online security as well,but I would strongly advice you to take your child to the branch,which will help them to familiarize with the process linking their account.Many banks are offering 4 to 6% rate of interest for the savings.ATM cards are the real benefit for them to understand how the transactions are happening and how to withdraw the money when you are on the go.
HOW DO I OPEN AN ACCOUNT FOR MY CHILD
Opening a kid’s account is not much different from opening a new account for us.Spent some time to analyze the bank which is closer to you and giving good features for you child’s account.Have 3 passport size photos of you and your child,your pan card and address proof,kid’s birth certificate and ID proof(may be a school dentity card/Aadhar card) and you would need to fill up simple application form to start with.
The good thing is any banks started giving freebies to reinforce the habit of young investor.After opening a kids account,start teaching your son or daughter how to practice basic banking process by involving them while filling the forms.
Demonstrate how to use ATM to withdraw money and check the account statements.This could be a valuable life lesson for them by prioritizing the savings against over spending.One that takes time to learn the process but encouraging them will make a huge difference.Opening a bank account for your child account will be the best way to introduce a concept of saving/investing at an early stage.
This should start as early as possible.Some parents like to be in denial mode about the fact that the child is not fully fledged to have a bank account.Be a guide and encourage children from time to time.You will be amazed at how much they can achieve!Children are very adaptable but the moment they realize that you are going to do everything for them,they let go.