To set aside a sum of money as savings for young children, children's bank accounts are the right choice. Of the different types of bank accounts, children's bank accounts are basically designed to introduce children to the basics of banking. They provide an opportunity for children to learn how to manage their money. Hence, opening a child's bank account is a promising step towards the child's future.
Today, children's bank accounts are offered by many banks. Several types of children's bank accounts are available. Certain banks pay reasonable interest rates on savings and some don't charge transaction fees, so be selective when opening an account.
Although children's bank accounts are not exactly profitable, they are considered one of the best ways to save money. Mostly, in a child's bank account, the interest is paid on an annual basis. A child's bank account is ideal for a teenager with a part-time job. A simple passbook-type savings account is well-suited for a youngster who can bank money from pocket money.
Opening a child's bank account is fairly easy. The first step is to select the appropriate account that suits you. After selecting the account, an application form will be provided for account opening. For the proof of identity, one must submit a birth certificate or passport in his child's name.
A child's bank account requires only a low minimum balance to open. Age limits and conditions for opening a child's bank account vary from bank to bank. Mostly, bank accounts for kids are operated by their parents or guardians. After the age of thirteen, it is possible to transfer the ownership of the account into the child's name.
In order to make saving a bit more fun, certain financial institutions offer gift vouchers and incentives. In addition, they provide a money box and a special passbook. Besides, they permit the child to choose a special name for his or her account. In short, a child's bank account is really designed for a child to get into the habit of saving.