Why does savings account always sound similar and associative to piggy banks especially for those opened for kids. Kids these days have to be taught on various financial aspects that tends to make them understand on how important it is to be financially sound. Savings accounts, in today's time, has always been talked about the most. Securing the amount of money for a better future through savings can be considered a feasible option. But there are also certain steps that needs to be necessarily looked upon while opening a kid's savings account.
Things to know before opening a kid's saving's account
Age of the child
A major point to be looked upon will always be the age factor. Many banks offer various accounts depending on even the age limit. Kids below the age of 18 will always require their parent\guardian to be around while opening an account. Parent\Guardian during this period will have complete access to the kids account and once turned 18 the kids will be responsible for their own.
Any account that needs to be in a bank will require certain documents for verification. So when a kids savings account is opened, the date of birth proof along with parents\guardians Aadhar card and PAN card proof is required.
While opening a savings account a minimum amount of balance is required. A minimum account can vary from Rs, 2,500 to 5,000.
Banks always provide a standing instruction on the facility of the debiting the amount of money from the parents account to the minors account.
Setting up of limit
Parents/Guardians should also find out the spending limit of the child. The setting up of the limit will often vary from banks to banks. The amount can vary from Rs. 2,500 to Rs. 5,000.
It is also important to make sure on how the bank communicates with the parent\guardian of the spending by the child. Informing them through SMS or via emails can be feasible to keep a track on their spending.
Make sure that the bank where the account is opened gives a personalized cheque book with it. The child should always be educated on how to draw a cheque and also should be made familiar with monthly statements.
Such steps need to be always kept in mind while opening a kids savings account for efficient functioning. Gone are the days of piggy banks and let alone welcome kids savings account.