For most adults in India, a savings bank account is the primary point of contact with the country's financial system. We open a bank account for multiple reasons, most prominent among them is to be able to save some money for sudden future needs. For children, savings accounts are usually opened by their parents but they may serve as a learning experience for them on how to manage money and save it. Nowadays, several banks offer to open accounts specifically designed for children.
However, there are some fine prints that you should take into consideration when opening a bank account for your child.
1) Age Of The Child
As the RBI has allowed banks to let children above the age of 10 years open and operate bank accounts themselves, most banks have categorised savings bank accounts for children in two categories: One for those below the age of 10 and another for those in the 10-18 age group. Once the child becomes an adult, the account becomes non-operative and it has to be converted into a regular savings account.
2) Spending Limit
Parents must look for both spending and withdrawal limits allowed for the minor's account. Some banks also impose a cap on the number of debit transactions in a financial year on these accounts.
3) Debit Cards
Some banks give the option of carrying a debit card with a minor's account, which the parents can use. They also must ensure that SMS alerts are active for any transaction on these accounts to be able to monitor the transactions.
4) Minimum Balance
Most banks will require you to maintain a minimum balance in these accounts. Make sure you adhere to this condition to avoid any penalty.
5) Internet Banking
Internet banking allows customers to operate their accounts from anywhere. However, for a minor's bank account, this facility should be availed under strict parental guidance. Avoid sharing passwords with your child as a precaution.