Opening a bank account in your child’s name is the first step in acquainting them with money matters. Familiarity with the basics of banking and finance can go a long way in inculcating the habit of saving in them. But, before you go to your banker to open a child’s bank account, keep some things in mind.
If the child is less than 18 years of age, then the bank will call these minor accounts. For children below the age of 10 years, the account has to be operated jointly with the parent or guardian. If the age of the child is between 10 to 18 years, the account can be operated by the child. The account can be converted into a regular savings account on attaining the age of 18 years and thereafter the parent cannot operate it.
However, facilities like internet banking, ATM or debit card, check book facility etc. are available in the minor account but for this first talk to the bank. Sometimes the password is not available on these accounts.
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Teach the child about the check book and its features as well as how to use it. Draw a check in your name and see if the information on the debit and credit cards is correct.
As a guardian to keep funds in the minor’s account, you can transfer money from your account to the minor’s account. You can also give standing instructions from your account so that money is transferred to your child’s account every month. If you want, you can also transfer money through IMPS or NEFT.
Some banks may issue photo ATM cards which may also contain the name of the parents. Take your child to the ATM and show them how to use the ATM card safely. In fact, whenever any banking transaction is done, the children should be made aware of the safe banking facilities. Teach kids about important do’s and don’ts of banking while using ATM card or net banking.
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