It's time your child had a Savings Account. Here's why

Want your child to grow up to be a financially responsible adult? Then, start now! Learning to plan, budget, and save money is just as important as what your child will learn in school. And the best way to set them on the right path is by helping them open a savings bank account, 

Having a savings account can teach them about saving and managing money effectively to achieve their goals and other nuances of personal finance. Additionally, a savings account designed especially for children like IDFC FIRST Bank's Minor Savings Account enables parents to invest regularly and save for their future. 

Benefits of opening a Savings Account for your child

There are a number of reasons to open a Minor's Savings Account for your child

1. Respecting the value of money

Unfortunately, children today do not understand the importance of earning and saving since most parents are only too eager to fulfil their child's every wish. By teaching them to deposit their allowance or gift money into a savings account and use it when needed, your child will understand the value of money and appreciate everything you do for them.

2. Learning to manage own finances

A savings bank account can help your child understand how to manage their finances. They will learn how to plan, budget, and handle money in everyday life. They will also receive first-hand knowledge on how to bank – whether online banking, depositing a cheque, or withdrawing cash from an ATM. You can even take their financial education one step further and teach them to leverage certain saving tools, such as fixed and recurring deposits.

3. Appreciating 'delayed gratification'

Savings accounts can also impart the crucial value of delayed gratification. By urging kids to save, they can learn to resist the temptation of impulsively spending in favour of a better, greater reward later. This value will hold them in good stead all their life. 

4. Inculcating a goal-based saving habit

Learning how to save for each life goal can lay the foundation for a financially stable and secure future. A savings account is the first step that can help kids start small. They can learn to save for various goals, such as a shopping expedition at the mall, a cycle, a school trip, gifts for friends and family, etc.

5. Learning the power of compounding

With their money accruing interest in their savings account and growing with the principal amount, your child can experience the power of compounding. This will motivate them to save more dedicatedly and create wealth as they grow into adults. 

Saving for the Future: Lastly, and most importantly, a savings account for your child is an excellent way to save for their future. You, as a parent, can deposit money periodically that will grow exponentially over the years. 

How to open a Savings Bank Account for a child

A lot of banks offer savings account for minors. It is essential to research, evaluate, and choose a bank that best suits your needs based on the interest rate offered, accessibility, and other features that make banking easy for your child. 

Opening a Minor's Savings Account for your child is relatively straightforward. Start by filling out the application form with your child as the primary account holder and a parent or legal guardian as the joint account holder. Many banks, including IDFC FIRST Bank, have a simple online account opening process for minors. 

You will have to submit minimal documentation, such as your child's birth certificate, your own identification documents, such as PAN and Aadhaar, and photographs for both of you and any other document as required by the respective bank. The savings account can be active in a few days, ready for your child to start banking.

It is never too early to start your child on a journey of financial literacy. Opening a savings account is one of the best gifts you can give them. IDFC FIRST Bank offers a Minor's Savings Account just for this purpose. With up to 7% interest rate, free unlimited fund transfers, this savings account is the perfect choice as a starter for your child.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.