Most of us were intimidated of banks as children – these places always seemed to be abuzz with a lot of frenetic activity with serious-faced people milling about all over the place. For many of us, it must have taken some amount of learning and training to get used to the concept of banking as adults. Some of us may still be intimidated of banks and may be using only the basic features that these financial institutions provide, completely ignoring the vast plethora of features that exist in them. It certainly seems that if more of us had experiences with banks as children, we would have been better placed today to take these things in our stride.
Well, in those times we did not have much access to things like savings accounts for children and other child-oriented banking features, but now we do have them. Apart from being a much valuable way of training kids in an important aspect of life – banking – this is also a way to make them better individuals later on in life. It is actually no wonder when we see that all major banks across the world have savings accounts for children now which are more or less a lesson from their parents so that they can have better financial dealings in their later years as adults.
There are different types of savings accounts for children. The most common of these accounts – perhaps because of its simplicity – is the easy access account. Like with other children’s accounts, you can make very small deposits in these accounts and there are no restrictions such as minimum monthly deposits. The funds can also be withdrawn at any time with short or even no notice, and no charges are generally applied on the withdrawal. Since these are savings accounts, there is an applicable rate of interest on the deposits that are made in these accounts, which can be withdrawn at any time according to the policies of the accounts.
Though most of these accounts do not have many restrictions, you must know that there are some in which a notice period is required before you can make withdrawal and these will also typically have a requirement for a minimum amount of monthly deposit. But if the accounts impose such restrictions, they will also compensate for them with a higher rate of interest on the deposits made, which means the child can save a larger sum of money.
Those are the formal rules that apply to savings accounts for children, but we need to look at the larger picture here. These accounts are really helpful because they teach kids the importance of money and teach them how to save it. Banks and even the governments are going all out to inculcate these values in children so that the future generations do not suffer from the high levels of indebtedness that the current generation suffers. A small but significant step in that direction would be to train children in saving money when they are still young. Parents need to shop around and find out the best savings accounts for children. These could be one of the best gifts they can give to their children, which would last them a lifetime.
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Marcilio David is a Cardiologist and Internet Entrepreneur. Learn more tips and tricks about Personal Finances, and get a FREE Student Loan EbookThe Smart Loans Guide
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