Secure the financial future of your child with a Kids Savings Account
- You can open a Savings Account for your infant from the first day of their birth.
- You can operate the account as a parent or guardian until your child turns 18.
- You can use the savings to finance your child’s higher education.
- Saving money early on will help the child understand the importance of saving.
- Few banks also offer investment plans for child education in the form of RD.
While the joy of putting a coin in a piggy bank is still relevant, parents have turned to banks in order to start saving money for their children. We, as adults, have realised the importance of saving money in banks quite later in our lives. Imagine if you can do that for your children from the day they were born. How secure will you be making your child's future!
With banking becoming an integral part of our lives, familiarising your children with the basics will only prove beneficial. Banks offer an impressive range of accounts, including a special savings account for children. Opening a savings account when your child is an infant, depositing money in it frequently, and inculcating the proper savings discipline can help your child understand the importance of saving and spending money wisely. Find out all about bank accounts for kids in this article.
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Kids Savings Account – Salient Features
- You can open a bank account for kids from the day of their birth, i.e. when your baby turns one day old.
- Your baby should be named as the primary account holder, whereas you (as the parent or guardian) can be the secondary holder.
- You can operate the account on behalf of your babies till they turn 18.
- Once the child turns 18, the account can be converted to a regular savings account.
- A Child Savings Account works in the same way as a regular Savings Account in that it draws annual interest on deposits.
How to Open a Bank Account for Kids – Process and Documentation
You can open a child savings account by visiting your bank or via its online platform. You need to fill the account opening form and provide the below documents to open the account.
- ID proof documents of the parent/guardian – e.g., PAN, Passport, Aadhaar, Driver's License, etc.
- ID proof documents of the parent/guardian – e.g., Passport, Aadhaar, Voter's ID, Driver's License, utility bills, etc.
- Photographs of both the minor and the parent/guardian.
- Birth certificate of the minor.
Benefits of Bank Account for Children
- The account comes with options of net banking, mobile banking and debit cards.
- Debit cards provided with these accounts generally have a withdrawal limit.
- Above a certain age, specified by few banks, children can operate the account by themselves.
- While some banks need you to maintain a monthly average balance (MAB), other banks offer a no-frills or zero-balance account.
- Few banks offer Free education insurance coverage on these accounts
- Some banks allow you to open both a savings account and Recurring Deposit (RD) with the bank account for child.
- Sums deposited into this account can be used to fund the child's higher education.
- You can deposit the cash gifts received by the baby on various milestones – birthdays, festivals, cash prizes won at school, etc.
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Introducing your children to banking at an early age will help them understand the importance of banking and the value of money. If parents save money on behalf of their children from their birth, by the time the child is grown-up, there would be sufficient money for their disposal. You can use this money to ensure that the child gets proper education and facilities in future.
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*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.