Factors to consider while opening children’s bank accounts

One of the best life lessons you can impart to your child is that of financial responsibility. Starting early to teach them the values of earning, spending mindfully, saving, and growing their money can help them become financially responsible. Along with this, having a children's bank account could be another step in their journey towards financial success. Let's explore a few things to consider before opening one.

Factors to consider while choosing the best Savings Account for your child 

1. Spending limit 

One of the most crucial points to check before opening children’s bank accounts is the daily maximum spending limit. This will ensure your child does not spend more than they need to. Communicating to your child what these limits are will introduce them to the idea of spending responsibly. Most banks offer a daily spending and cash withdrawal limit of anywhere between Rs 1,000 and Rs 5,000. 

Remember to check the minimum balance that must be maintained in the children's bank accounts at all times. If funds go below the minimum balance, the account holder could be penalised. Most banks set their minimum balance to Rs 2,000 - Rs 10,000. 

2. Age limit

Most banks allow children above 10-12 years of age to operate an account on their own. This is not to say that you cannot open an account for your child below this age limit. In the case of children below 10-12 years, a parent or a guardian will have to operate the account. 

Also read: https://www.idfcfirstbank.com/finfirst-blogs/savings-account/how-to-save-and-invest-for-your-children-education

3. Ease of fund transfer

To be able to easily transfer money into your children's bank accounts, make sure that the bank offers the facility of standing order. You can set up a standing order to transfer a fixed amount at a fixed date each month. This way, the transfer can happen in auto mode, saving you the hassle of remembering and manually transferring money to your child’s account. 

4. Internet banking

Internet banking has made it remarkably easy to conduct all kinds of transactions without ever having to set foot inside a bank branch. It is a good idea to check the internet banking facilities available for children’s bank accounts. Find out the limits on internet banking and the security measures in place, such as two-factor authentication. Make a note of the log-in and password details required to access internet banking and monitor the spending, especially in the case of younger children.

Conclusion

Introduce your children to the basics of banking and finance by opening a savings bank account for them. You can get them started on this journey with IDFC FIRST Bank’s Minor’s Savings Account. It offers free fund transfers, free ATM transactions, and a VISA debit card, among many other features. Moreover, you benefit from high and competitive interest rates that is one of the best in the industry. As your child dreams big, the money grows bigger too! As your child dreams big, the money grows bigger, too!

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.