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Home / Money / Calculators /  One minute guide: Savings bank accounts that your children can operate

If your child is above the age of 10, she can open and operate a savings bank account independently. She can withdraw, transfer and deposit money without the consent of a guardian. Not all banks offer this product. If your child is below the age of 10, she will need her guardian’s consent and the account will be opened jointly with the parent’s account, and can be operated jointly by the guardian and the child, or only by the parent. Let us take a look at how a savings account that can be opened independently works.

WHAT IS IT?

Only children above the age of 10 can open and operate these savings bank account independently. The child should also be able to sign uniformly. She will be the sole operator of the account. To open this account, your child will have to provide know-your-customer (KYC) documents, submit a proof of date of birth, two photographs and also KYC of a parent. Some banks accept a written introduction by the principal on the school’s letterhead. This letter should also mention the child’s residential address.

A child can visit any branch of the bank that offers such savings accounts and submit the documents. Once the account is opened, she will get a debit card and a cheque book.

These accounts, however, come with some limitations. The withdrawal and transaction limits range between 1,000 and 5,000 per day. The minimum balance requirement ranges from 100 to 2,500, and the periodicity can be quarterly or monthly. If the balance is not maintained, there will be a penalty that can start from 100. Some banks don’t have a minimum balance requirement. The number of automated teller machine (ATM) transactions is the same as that of a normal bank account, and varies from bank to bank. Your child will be able to do basic Internet banking. Once she turns 18, the account gets converted into a regular account.

THINGS TO REMEMBER

Exposing a child to banking using a formal method is a good approach. If you think your child should learn to manage her money using formal banking channel, you could allow her to open and operate her own account. This will help her do actual transactions and understand how money works apart from the aspect of savings. Even if the aim is saving, a bank account will have more features, such as interest rate, than a piggy bank. If you are planning to allow your child to open such an account, go for a savings account that has low service charges. See if you can opt for a bank account where the minimum balance requirement is low or nil. Check for the minimum transaction amount and customise it if required.

If you are not comfortable giving your child complete access to a bank account, there are products available that allow a child to open an account only with the consent of a guardian.

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