Plan your child future with the Kids Savings Account

June 04, 2020

Plan your child future with the Kids Savings Account

Encouraging children to save is one of the best things you can do to secure their future. As a parent, you should make sure that your child's future is safe. Keep reading to know how you can plan your child's future with the Kids Savings Account.

Many parents stress on the fact of saving for their child. There are many ways you can teach your child about it – be in the form of getting an insurance policy or opening a Fixed Deposit.

Teaching your child the importance of savings is the duty of every parent. You don't have to wait for your child to turn 18 to use banking facilities as banks allow you to open an account for a minor.

You can open and operate the Kids Savings Account to plan his/her future at a young age. Do you want your child to learn the importance of saving?

Five benefits of opening the account:

  1. It teaches them the value of money and why one should save it
  2. It teaches them to be disciplined about money matters
  3. It teaches them to stay focused on priorities
  4. They can learn math skills, thanks to compound interest
  5. Saving will teach them about how they afford some things in the long-run

Here are few things to consider before you open Kids Savings Account

1. Age:

For minors, banks allow you to open two types of Kids Savings Account depending on the age group of your child.

  • Below 10 years
  • Between 10 and 18 years of age

Before opening a Kids Savings Account, you need to consider the age of the child. If your kid is below 10 years, then this can be opened in the form of a joint account, wherein the kid and one of the parents will be the joint holder. In either case, if your child is between 10 and 18 years, the minor can operate the account as it will teach him/her about the discipline of savings.Once your child crosses 18 years of age, the account will become inactive, and it will be converted into a regular Savings Account.

2. Funds transfer:

When you plan to open, Kids Savings Account, check with the bank if you are allowed to transfer funds through NEFT. In case you want to transfer money from your account to the kid's account, the bank should enable you to do it.

3. Spending limits and debits:

These account types have a spending limit, and it varies from bank to bank. Some banks allow you to spend Rs 1,000 to Rs 2,000 daily. Banks issue Debit Card at the time of initiating the account opening process. The banks also cap the number of debits you do in the Kids Savings Account in a financial year.

4. Minimum balance:

Just like a regular savings account, wherein you're required to maintain a specified amount to keep the account running. Similarly, if you have initiated a Kids Savings Account, you should maintain an average balance up to Rs 5,000.As a parent, you should maintain a minimum amount in the account to avoid any additional charges.

5. Security and banking communications:

The Kids Savings Account comes with the security of zero liability, wherein if there is theft or misplacement of a Debit Card, this feature will keep the card protected. The banks also provide you updates with regards to transactions, offers and account updates.

Kids Savings Account is an excellent way of teaching your child about saving money and how to manage it. This way, your kid can also learn about the basic banking processes like opening an account, depositing money and money management. If you're planning to open one, then get in touch with ICICI Bank today.

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