Gift your kid a savings account

If your daughter is one of those who have been responsible with her pennies, she deserves a saving account for sure on her 18^th birthday. Since 2014, there has been a visible increase in the number of savings accounts for minors in private and public sector banks after the Reserve Bank of India (RBI) gave banks a green signal.

The Central Bank authorises parents and guardians of children less than 10 years of age to operate the savings account after they can operate it independently. Once the child turns 18, the account becomes dormant and in order to get the regular benefits and interest, it is essential to convert it into a regular savings account. It is equally important to allow them to make harmless mistakes and let them learn from them. The idea must be to train or educate the child and not incur financial losses in any way. You could also opt for a kid’s a savings account with restricted withdrawals or expenditure via debit cards is a good idea till your child is matured enough.

Just opening a savings account without imparting the right education to little ones could result in more harm than good for your children’s future. So, before you finalise on the savings account for your minor or teen, scan banks that have the lowest minimum balance criterion. Doing so will the money from getting locked up at low interest.

So, a savings account with a bank looks like a perfect gift for children to make them learn about banking. Make the most of this opportunity to teach your child about money matters and being responsible.

Wonders of a minor’s savings account:

Kid’s savings account teaches them 

• to plan ahead
• to stay focused on goals and priorities
• to save for things till they can afford it
• the value of money 
• to learn basic math skills
• to grow their money  
• to become comfortable with bank operations and financial dealings.

Documents required for opening kids savings account

To open a savings account for minors, you may be required to submit a few documents. 

These include 

• a recent photograph of the minor applicant
• proof of date of birth of minor (birth certificate issued by Municipal Corporation or Passport)
• proof of relationship between the parent/guardian and the minor applicant (ration card or life insurance policy), 
• PAN of the parents/guardian and address proof.

A savings account for minors is an ideal way to expose them to financial education and first-hand experience in money matters. It is a good idea to encourage children to be responsible with money and make sincere efforts to answer their questions on bank operations.

We, at https://savingaccount.in/blog/kids-bank-account have all the important information that you must know about children’s savings accounts. Stay with us for more.