Kids savings account are ideal, if you wish to inculcate a habit of savings in your children at an early age.
However, it is important to remember that the income earned through interest would be clubbed as interest earned by the parent. Therefore, all interest income earned by way of recurring deposits and such other instruments would be added to the income of the parent. Also, the minimum and other balances required vary and you need to check with individual banks.
While opting for a kids saving account, look for a host of things, including interest rate, service and other aspects. We have chosen a few kids savings account, which you could consider, based on interest rates, insurance, ease of banking, branch network etc. No single bank in this country can provide all at the same time. So, pick a feature that suits you the best.
Here are some saving accounts you should open for your kids.
My First Yes Account
This savings account is from Yes Bank, and we have chosen it for a number of reasons. The first is that the interest rate on the savings account balance is as high as 6 per cent.
All government banks at the moment offer you an interest rate of 4 per cent. The other big reason, this is the best savings account for kids, is because it requires an average monthly balance of just Rs 2,500.
If you have an account in a private sector bank, in the city, the minimum balance required is Rs 10,000.
You can transfer money automatically from the parents account to the child's account.
SBI Savings Account For Minors
SBI Pehla Kadam, Pehla Udaan is a great minors savings account. The best benefit is that you do not have to worry of maintaining a minimum balance under the account. You do not get charged on zero balances.
You can get a child's photo embossed on the debit card and there is an auto sweep facility that is also available.
The one advantage of the scheme is that SBI has the largest branch network in the country and hence, if you want your kid to visit the branch, it is the best option.
A great account to have, though do not expect too much in terms of service. There is an option of giving an instruction for opening a recurring deposit account. This is a good option, simply because the child can learn how it works and how interest is earned on the recurring deposit. It is always a great feature to have in an account.
Smart Star Savings Account
This account from ICICI Bank, the country's largest private sector bank. Under this you can open two accounts - one is with the consent of the guardian, while the other is without the consent of the guardian.
Interestingly, what the bank has done is that with a debit card on the former, there is a debit transaction limit of Rs 2 lakhs that is placed. On the hand the account without the guardian consent has a limit of Rs 50,000.
The interest rate on this savings account is lower than that offered by Yes Bank Kids Account and the Kotak Mahindra Kids account.
The Junior Savings Accounts For Kids
This is a product from Kotak Mahindra Bank. If you have balances above Rs 1 lakh, in your kids account, you get an interest rate of 6 per cent, while under Rs 1 lakh, the interest is 5 per cent, which is higher than most banks in the country.
You also get a personalized debt card for your child. You can invest in this child savings plans also through small amounts of recurring deposit of Rs 1,000. This will help in allowing your child to save small amounts each month.
Kids Advantage Account , HDFC Bank
In this account, there is a free education insurance of Rs 1 lakh, in case of death of the parent through accidents.
Children are allowed to withdraw amounts of Rs 2,500 per day at the ATMs.not the best in terms of interest rates, which are capped at 4 per cent on savings account.
While we have tried to provide the latest and best possible information you should check with the bank for details. Norms keep changing with the bank from time to time.