Facts about Bank Accounts for Kids

June 25, 2018 Finance Talk Valli Sarvani No comments

Do you know that you can open a bank account in the name of your minor child?

Banks provide minor accounts in order to encourage savings habit among children.

Here are some important points about bank accounts for kids:

You can open a saving bank account even under the name of a baby. But, you should have an account in the same bank.
Even if you open under the name of a child below the age of 10 years, he or she cannot operate it until he or she turns 10.
ID proofs of both the child and guardian are required to open an account.
If the child is aged is more than 10 years old, then signature specimens are essential. The specimen signatures of guardian are also needed.
The minimum balance requirement varies with the bank. For example, HDFC account states that ₹5,000 is the minimum balance for minors whereas it is ₹10,000 for adults.
Normally, the savings accounts of kids fetch higher interest rates than the accounts of adults.
You can even open a joint bank account in the name of your child and yourself.
Debit cards are provided but the withdrawal limits are different from those of normal accounts.
You can transfer a regular fixed amount to your child’s account as a recurring deposit.
Some banks automatically lock the excess income in the saving banks account after a certain amount to a fixed deposit to maximize benefits.
Cheque book and net banking facilities are also provided.
Top banks provide insurance coverage for the education of the kids in the unforeseen event of their guardian’s death.
The account will be converted into a regular savings account after the child turns 18.