There are plenty of banks currently offering Kids Savings Bank Accounts in India. These include those from Kotak Bank, ICICI Bank, HDFC Bank and a host of others.
You might often see an executive of a bank walk up to you, asking you whether you would want to open a Kids Savings Bank Account in India.
To be honest one does not see any advantage in opening such an account. Perhaps, it would excite your kid to have a bank account and he could learn to withdraw and stuff from his account. Beyond that one does not see any great advantage.
In fact, you would need to monitor and maintain one more account and also keep extra money in the account as a balance. These days with so many documents, password and bank accounts to take care-off, it would be just another addition. To add to your misery, some banks need you to maintain a balance of Rs 5000 in these accounts and if it is not maintained there would be charges. What a waste!
What do these banks offer under the scheme?
Banks offer several facilities with these accounts and in some cases it a little restricted as compared to normal saving accounts of individuals. Some of the facilities offered include a free personalized debit card, personalized cheque books, free internet banking, email statement free of cost etc.
Now, in some of these cases, the children might develop an unnecessary habit of shopping and using the debit card, instead of inculcating the habit of saving. The only hope is that these accounts facilitate a habit of understanding the importance of savings at an early age.
Cannot see any major advantage in opening an account. Perhaps, if you want to teach your kid how to save, a cumulative account at a bank would be a much better option.