It is better than saving in a piggy bank, as the money earns interest. In the future, it can be used for fulfilling any of the child's need or making further investments.
Many parents often want to open bank accounts for their kids, to make them financially disciplined and help them learn to manage their money and save for the future. There are various banks which offer savings account for kids, with various features. It is better than saving in a piggy bank as the money also earns interest. After the amount reaches a specified limit, it can be used for fulfilling any of their needs or making further investments. Experts say, with savings account kids can learn, monitor, and understand how their money grows with time.
If you are also planning to open a savings account for your kids, know the best kids savings accounts offered by banks.
State Bank of India (SBI)
SBI offers two accounts – PehlaKadam and PehliUdaan – specially designed for kids. The PehlaKadam savings account can be opened by any kid age below 18 years. This savings account is a joint account with the parent and the child, where the parent will be the secondary account holder and the kid will be the primary holder. Unlike a normal savings account, there are no minimum balance criteria in this account. Features such as mobile banking and issuance of cheque books are also available with the PehlaKadam savings account.
For opening a PehliUdaan saving account, a child should be above 15 and below 18 years of age. Unlike PehlaKadam, this is a single operating savings account. Similar to PehlaKadam there are no minimum balance criteria that need to be maintained. All features for PehlaUdaan savings account are also similar to the PehlaKadam savings account.
ICICI Bank offers two accounts — Young Stars Account and Young Stars & Smart Star Account, specially designed for kids. The Young Stars Account can be opened for any child under 18 years of age. However, either parents or guardian need to hold a savings account with ICICI Bank. If one doesn’t have an account with the bank, they can open both the accounts, parent’s saving account along with the young star’s account together.
The Young Stars & Smart Star Account can be opened for a child above the age of 10. The child can also operate the account all by themselves. However, a minimum monthly average balance (MAB) of Rs 2,500 needs to be maintained in the Young Stars Savings Account.
The Kids Advantage Account can be opened for any child up to 18 years of age. However, either parents or guardian needs to hold a savings account with HDFC Bank.
This savings account comes with the minimum balance criteria of Rs 1,000 that needs to be maintained, and a minimum tenure of 1 year. They also provide free education insurance cover of Rs 1 lakh in case of death of the parent or guardian to the child. There is also a MoneyMaximizer facility, wherein once the balance in the kid’s savings account exceeds Rs 35,000, the excess of Rs 25,000 gets automatically transferred to a 1 year fixed deposit, in the child’s name.
Facilities such as ATM, international debit card are also provided by the bank for children aged between 7 and 18 years in the child’s name. The child can withdraw up to Rs 2,500 at ATMs and spend Rs 10,000 at merchant locations per day, with the official permission of the parent to the bank.
To open an HSBC Premier Junior Account, one first needs to be an HSBC Premier customer. After being a premier customer, you can open a Junior Savings Account. You can also go for a supplementary credit card if the age of the child is below 18 or platinum debit card for your child if the age of the child is over 16. The bank also offers other services such as HSBC Premier overseas education benefits, global safety net, and emergency encashment services.
The Kotak Bank Junior Bank Account comes with the option of 10-year recurring deposit and linked Systematic Investment Plans (SIP). This is brought in to provide long-term savings for the child. Kotak Junior Bank Account also offers 6 per cent interest per annum. It also offers junior ID card for children and comes with a rewards programme with benefits like movie tickets, book vouchers, and discount vouchers. Debit cards are also issued on the request of the parent for kids above 10 years with a maximum withdrawal limit of Rs 5,000.