Choices, choices. Your kids and you are spoilt for choices. Modern day parents want to ensure that their kids get the best of everything. Even summer camps are researched thoroughly because it’s all about what your kid is going to learn.
Their future is well planned out for and parents start saving up even before the kid is born. But the best way to teach your kid how to deal with finances is to involve them in planning for their future. Here’s where a Kids’ Savings Account could be the teacher for their teen years.
Why should you choose a Kids’ Savings Account?
Relatives love spoiling children with small gifts in the form of money. Your child either splurges them or stows them away in the piggy savings. But if these are diverted to a bank account, the money will be safe and your child can earn interest on it. In this way, you are building a corpus for their future with some idle money.
You can also inculcate a savings habit in your child through this practice and can teach him the basics of banking operations.
Moreover, when required, they can avail an education loan from their banks at competitive rates.
Which banks offer the highest interest rates on savings account for kids?
Both, private and public sector banks, offer savings bank accounts for children. It can be operated by the parent or guardian till they turn 18, and thereafter, can be transferred to their name.
Saving bank accounts for children perform like any other regular savings account with all the regular features, like ATM cash withdrawal facility, debit card, and internet and mobile banking. Depending on the age of the child, banks also issue a dedicated ATM card in the child’s name.
Parents can give standing instruction for a fixed amount ranging from as low as Rs.500 as RD or SIP, for creating a corpus for the child’s future.
Here are the top 5 Savings Accounts for kids – Page 2
Top 5 Kids Savings accounts
1: Kotak Mahindra My Junior Account:
Kotak bank offers a children’s savings account with the highest interest rate. ‘My Junior Account’ from Kotak Mahindra Bank offers 6% interest if the minimum balance is above 1 lakh and 5% for up to 1 lakh. This account comes with an ATM withdrawal limit of Rs.5000. The average monthly balance to be maintained under this account is Rs.5000.
Kotak bank offers a bundled account opening avenue where parents can open a savings account with them and link the same to their kids’ account for making regular systematic investments, like an RD or SIP. Child account holders at Kotak bank can also enjoy exclusive privileges while shopping for kids’ brands, edutainments and while dining out at their favourite joints.
2: HDFC Bank Kids Advantage Account:
HDFC Bank’s ‘Kids Advantage Account’ can be opened for children up to 18 years of age, if you have a savings account with HDFC Bank. This account calls for maintaining a minimum average monthly balance of Rs. 5,000. HDFC offers ATM card for children in their name, after your due approval. It comes with a cash withdrawal limit of Rs. 2,500 and a daily shopping limit of Rs. 10,000. The interest rate offered by the bank is 4%.
The bank offers a free sweep-in facility. This means that when the account balance crosses Rs.35,000, the excess amount of Rs.25,000 can be converted to a FD at attractive higher interest rates. A free education insurance coverage of Rs 1 lakh in the event of accidental death of the parent is also an add-on feature of this account.
3: Axis Bank Future Stars Savings Account:
Axis Bank offers a dedicated savings account for children called ‘Future Stars Savings Account’. This account can be opened by the guardian and the bank issues a cheque book and an ATM card for the parent if the child is below 10 years of age. The account comes with a low minimum opening deposit of Rs.2,500. The interest rate is 4%.
The ATM cash withdrawal limit of this account is Rs.1500. There is a loyalty program with reward points for account holders, for maintaining a monthly balance of Rs.25000. No average monthly balance required if a fixed deposit of Rs.25000 (for 6 months) and RD of Rs.2000 (for a year) is linked to the account. Personal accident coverage up to 2lakhs is provided if the card is swiped once in 6 months. A debit card with your child’s image is an attractive feature which your child will like.
4: IDBI Bank Power Kids Account:
IDBI Bank offers a children’s saving account known as the ‘IDBI Bank Power Kids Account’. The account comes with a minimum account balance of Rs. 500 and no charges for non maintenance of AQB. The bank offers exclusively designed Kids ATM Cards and withdrawal limits up to Rs. 2,000 at an ATM or Point of Sale.
The interest rate offered is 4%. Parents can also plan systematic investments in RD, SIP or Term Deposits by linking their regular savings accounts with the same bank to this account.
5: ICICI Bank Young Stars Savings Account:
‘ICICI Bank Young Stars Account’ is available for children and teenagers up till 18 years. The guardian can open and operate the account on behalf of the minor. The bank offers a service plan known as the ‘Smart Star Account’ under which minors above 10 years of age can independently open and operate the account.
The minimum Monthly Average Balance (MAB) to be maintained for the ICICI Bank Young Stars Account is Rs.2, 500. The account comes with a free Young Stars Debit Card allowing both cash withdrawals and Point Of Sale Service. The interest rate is 4%, which is calculated on the daily balance.
Having a savings bank account will not only give children a sense of financial responsibility, but will also help them understanding how finance and banking systems work. You can proudly watch your adult child manage money even better for their own children. Your kids and grand-kids deserve all the world has to offer.
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