A savings account is almost a pre-requisite for someone who starts earning. It keeps reminding us that income needs to be saved for our goals. Maintaining a savings account also makes us familiar with the banking habits. The sooner you open it, the faster you learn the world of banking. But, do kids need a bank account? It’s a debatable question. Most of us would agree that we need to inculcate the habit of savings to children and introduce them to the world of banking early in their lives. This will help them manage their finances better than us when they grow up.
Here are some useful bank accounts for kids.
1) Kotak My Junior Account
This is the caption of the account – Early to Save. Early to Earn. It comes as a package with a junior savings account + guardian account + option to open RD/SIP. There is an interest of 6% p.a on the balance of savings account. Personalized debit card is being offered for this account along with attractive discounts on partner brands across dining, edutainment, shopping, etc. There are exclusive privileges on this account. It can be applied directly at any branch of Kotak Mahindra Bank or online.
2) Axis Future Stars Savings Account
It has been designed for children up to the age of 18 years. A guardian will be handed over a cheque book and ATM card. The account has been designed to teach kids principles of money management. Minimum deposit of Rs. 2500 needs to be maintained. You can also automate money transfer from parents account to this one every week/month. Sms alerts, statements, free transactions at ATMs are the same as a normal bank account. For children up to age of 10, ATM card will be issued with daily limit of Rs. 1500. ATM cards can have customized images too.
3) ICICI Bank Young Stars and Smart Star Accounts
A free young star debit card is issued with this account. It can be used at most of POS machines and ATM centers. Limits on the debit card are Rs. 1000 to 5000 for shopping and withdrawals. Special internet banking is also allowed here. Money multiplier facility and auto debit of money from parents account are other options provided.
A smart star account is particularly for children above the age of 10. They will be allowed to operate the account by themselves. Cheque book, internet banking, phone banking, etc are provided. It comes in two variants – debit limits of Rs. 50,000 and Rs. 2 lakhs per financial year.
4) HDFC Kids Advantage Account
This account issues an international debit card to children between 7-18 years of age. ATM withdrawal limit is Rs. 2,500 and shopping limit is Rs. 10,000 under this account. There is a special education insurance cover of Rs. 1,00,000. Free email alerts and quarterly statements are sent to monitor the account. Net banking, phone banking and mobile banking are other facilities given to the child. If the balance in the account crosses a certain limit, the remaining amount will be transferred to a fixed deposit of 1 year. Average monthly balance is Rs. 5000 under this account. Other fees and charges can be checked with the bank.