Banks offer users the opportunity to save their money by opening a savings account. Users, by opening a bank account get dual benefits- firstly, they are able to save money on a monthly basis, and secondly, they earn interest on a deposited amount. Banks, to reach almost all the individuals and offer them the opportunity to save money, come up with different types of savings accounts.
There are regular savings accounts, savings accounts for senior citizens, employers, children and more are also available. All the types of saving accounts differ a little from each other in terms of account opening process, benefits, features.Â
In this blog, we will discuss a child savings account and the top things to take care of while opening one. Before that, let us first understand what a child savings account is.
What is a Child Savings Account?
A child savings account is one of the types of savings accounts that are meant for children below the age of 10 years and between 10 to 18 years of age. The child savings accounts are supervised by the child’s guardian or parents. The process to apply for a child savings account is comparatively different from the process of opening a regular savings account or employee savings account.
The difference lies in the documents that are required to be submitted to open child savings accounts, benefits, etc. Following are some of the pointers about a child savings account-
- A child between the age of 10 to 18 years can operate the child savings account under the parents/guardian consent
- It is compulsory to link parents/guardians account with a child savings account
- The amount is deducted from the secondary bank account (parents/guardians account) in case there is a minimum balance requirement shortfall in a child savings account
- A child savings account encourages the habit of a child to save money
- The child savings account offer almost similar features to regular savings account like passbook facility, email statements, balance enquiries, ATM cum debit card with daily withdrawal limits and a lot more
- The child savings account becomes inoperative once the child attains the age of 18 years, hence, the child savings account needs to be converted to a regular savings account
Read More: Savings Account Benefits - The Complete List
How to Open a Child Savings Account?
To open a child savings account, all a user is required is to follow the given instructions-
- Visit the nearest bank branch
- Connect with the banking official to get a child savings account application
- Fill the application and submit the supporting documents along with the parents/guardian documents
- Upon submission, the banking official will verify the documents to process the child savings account
- Once the account is opened, all the banking credentials will be provided to the account holder
7 things to know before opening a Child Savings Account
Before opening a child savings account, there are a few things that should be taken care of to get maximum advantages. Get a look at the following factors to understand before opening a child savings account-
- There are banks that have made it mandatory to link a parents/guardians account with the child savings account (for children below the age of 10 years) whereas child savings accounts for the children above the age of 10 to 18 years can be operated by the child
- Once the child attains the age of 18 years, the child savings account becomes inoperative. Thus, it is mandatory to convert a child savings account to a regular savings account.
- The SMS or notification feature should be activated to receive transactions or other banking details
- Child savings account also requires a minimum balance requirement, thus, the account holder or parents/guardian should take care to maintain the balance
- Know the daily/monthly/yearly withdrawal limits
- For child savings account KYC, additional documents of parents are also required
- Look if the bank provides security against online theft, misplacement of the ATM cum debit card and more
What are the Documents Required to Open a Child Savings Account?
Following are the documents that are required to open a child savings account-
- Documents of minor like Aadhaar card, birth certificate
- Parents/guardian documents like PAN card, Aadhaar card and others for verification
- Applicant’s recent passport size photograph
- Address proof
- Proof of relationship between the minor and the guardian/parents
Conclusion
A child savings account is a good way to encourage the money-saving habits of the child. Such an account makes a child understand the importance of saving money and banking key terms. Interest is also offered on the deposited amount. Above all, parents/guardians supervision is highly required to maintain a child savings account.
