Best ways to open bank accounts for your kids
Parents are pleased to watch the excitement on their children’s faces when they take them out to amusement parks and other places of fun on their free days.
While this makes children happy, parents should also consider more exciting ways of giving their kids lifelong happiness. One of the ways of doing this is planning their financial future through opening of children’s accounts.
With this, you are also teaching the children the savings culture and how to manage bank accounts.
Parents do not need huge funds to open bank accounts for their children.
Banks offer different types of products for adults, organisations and children. Childrens’ accounts are usually for those below 18 years.
Some of the features of children’s bank accounts are: paying of interest; granting of loans for school fees; permission to withdraw without charges; and free gifts for children with certain bank balance.
On public holidays and special occasions, some banks also organise children’s parties to thrill them and provide an avenue for them to mix with other children.
By giving the bank a standing order, it could make it convenient for the parent to regularly fund his/her child’s account.
A parent may decide to compare the features of products offered by different banks to know which one to open for his/her children.
The following are some peculiar features of children’s accounts as put in place by different banks.
Different banks have different age requirements to qualify a child for a kid account. While some banks accept one year old kid as minimum, some have high age requirement like 10 years.
As a parent, you need a kid bank account that makes it easy for to open, pay regularly, withdraw money when you need it and close it when the need arises.
As a parent, you also need a bank that can allow you to migrate from one account to another with better savings and rewards.
You may also consider opening a kid’s bank account in your own bank or where you have your salary account. By this, you can just give a debit instruction to ensure the funding of the child’s account.
Some parents may want to have fixed savings accounts for their children. This will ensure that the money is not withdrawn for trivial issues but kept to cater for specific needs and a number of years. This will also attract higher interest rates.
Different banks offer diverse incentives to attract children’s account opening. Some woo the children with gifts, organise parties, give tips on children’s training, and organise raffle draws to enable them to win fantastic prices.
No minimum balance requirement.
Unless your child is a young entrepreneur who is actually writing cheques to pay bills and expenses, you will want to start off with a savings account, which will typically offer higher interest rates and fewer fees.
An online report on the issue by www.thesimpledollar.com highlights four things to watch out for in the children’s accounts, which are no minimum balance requirement; no monthly maintenance fees; online account management; and high interest rates.
Since your child may not have a lot of money to be saved at first, it is important to choose a savings vehicle with no minimum balance requirement. That way, you can save small amounts of money without worrying about falling short.
No monthly maintenance fees
Monthly maintenance fees can eat away at a small savings balance in a short amount of time. To preserve your child’s net worth as much as possible, choose a savings account with no monthly maintenance or account fees.
Online account management
While you may want to use a bank with a local branch to better illustrate the concept of a bank, it is also important to have online access. With online account management tools, it is much easier to keep track of your children’s growing nest egg for them until they are able to do it on their own.
A high interest rate
Since your children’s savings account will likely be in place until they reach adulthood, it is important to choose an interest-bearing account.