KoBanks have created different types of savings accounts to reach almost all individuals and offer them the opportunity to save. In terms of the account opening process, benefits, and features, all types of savings accounts are slightly different from each other.
In this blog, we will discuss a child’s savings account and the most important things to consider when opening one. Before that, let’s define a child savings account.
What is a Child Savings Account?
A child savings account is a type of savings account for children aged 10 to 18 years. The child’s savings account is supervised by the child’s guardian or parent. The process of opening a child savings account is different from the process of opening a regular savings account or employee savings.
The difference lies in the documents that must be brought to open a child savings account, benefits, etc. Here are some pointers on children’s savings accounts-
- A child between the ages of 10 and 18 can operate a child savings account with the permission of the parent/guardian
- It is mandatory to link the parent’s or guardian’s account to the child’s savings account.
- If there is a minimum balance in the child’s savings account, the amount is deducted from the secondary bank account (parent/guardian’s account).
- Children’s savings accounts encourage children’s saving habits
- Children’s savings accounts have many of the same features as regular savings accounts, such as passbooks, email reports, balance inquiries, ATM/debit cards with daily withdrawal limits, and more.
- When a child reaches the age of 18, the child’s savings account becomes inactive; Therefore, the child’s savings account must be converted into a regular savings account.
How to Open a Child Savings Account?
To open a child savings account, users only need to follow the instructions below:
- Go to the nearest bank branch
- Connect with banking officers to get a child savings account application
- Fill out the application and submit supporting documents along with parent/guardian documents
- After submission, the banking officer will verify the documents to process the child’s savings account
- All banking credentials will be provided to the account holder once the account is opened
7 things you need to know before opening a Child Savings Account
Consider the following factors before opening a child savings account:
- Some banks have made it mandatory to link a parent or guardian’s account to a child’s savings account (for children under the age of ten), while a child’s savings account for children aged ten to eighteen can be operated by the child.
- The child’s savings account becomes inactive once the child reaches the age of 18. Therefore, it is necessary to convert a child’s savings account into a regular savings account
- To receive transactions or other banking information, the SMS or notification feature must be activated
- A child’s savings account also requires a minimum balance requirement, so the account holder or parent/guardian must maintain the balance
- Learn about daily, monthly and yearly withdrawal limits
- Additional parental documents required for KYC child savings account
- Check to see if the bank offers protection against online theft, ATM or debit card misplacement, and other risks
What are the Documents Required to Open a Child Savings Account?
The following documents are required to open a child savings account:
- Underage documents like Aadhaar card, birth certificate
- Parent/guardian documents such as PAN card, Aadhaar card and others for verification
- Recent passport size photo of the applicant
- Proof of address
- Evidence of relationship between minors and guardians/parents
A child’s savings account is a great way to encourage your child’s saving habits. Such an account teaches a child the value of saving as well as important banking terms. Interest is also paid on the amount deposited. Above all, parental/guardian supervision is necessary to keep a child’s savings account active.
What is the withdrawal limit for a child’s savings account?
The withdrawal limit for a child’s savings account varies from bank to bank. It is best to contact the bank for more information.
Can I open a child savings account for my 5 year old child?
Yes, you can open a savings account for minors under the age of 10 and between 10 and 18 years.
What is the minimum balance required to open a child savings account?
The minimum balance required to open a child savings account differs from bank to bank.
Is it a good idea to open a child savings account?
A child’s savings account encourages a child’s saving habits while also teaching him the value of money and the functions of a bank.
Is it necessary to change a child’s savings account to a regular savings account after a certain period of time?
After the child reaches the age of 18, the child’s savings account must be changed to a regular savings account.