Banks offer savings accounts designed specifically for children. These include both the one the parents open on behalf of the child when he or she is still very young and the one you open for them when they are old and you allow them to run it. These accounts offer tremendous benefits for both the parents and the children. You need to visit a bank to get the options on offer in both cases.

This article will treat both scenarios together, highlighting their benefits and challenges. Apart from helping the parent to save for the child’s future education, these accounts offer the beneficiary children an opportunity to learn about how banks work when they grow up and take charge of running the accounts. They also make it easy for children to save money. You may begin to save money for your children using these types of accounts.

It is possible to change or switch your child’s savings account for secondary school or university to another type of account as soon as you deem it fit to do so. Banks and insurance companies have various products on display in this regard.

Here are five reasons to open a child’s saving account, according to www.families.com:

There is no minimum balance required

Many banks do not have a minimum balance that must be met before interest begins to accrue on the child’s savings accounts. This can be encouraging to both the parents and the child, because they begin to see money added to the account, simply because it is in the bank.

Helps kids to be familiar with how banking works

Many banks still offer passbook savings accounts. This means that your children will learn how to record deposits and withdrawals before graduating to opening current accounts.

Your children receive monthly or quarterly statements of account

This is an excellent opportunity for you to teach your children how to reconcile a statement to their accounts. It is fairly easy to reconcile a savings account.

Financial independence

Once your child has a job, she can begin making deposits and withdrawals on his/her own at the bank. This is one more step to financial independence.

See the rest at http://www.bookspen.com/5-reasons-need-open-savings-account-child/

Children saving account is very nice. I know a man that put 10k every month into his daughter's saving account.

Nah, if you guys had been on the Newborn thread in Health section a few weeks back, we had a robust discussion, complete with expert advice from people in the financial/insurance world, on how to invest the money rather than leaving it in a Savings account to be earning a meagre 1 to 3% interest. There's more you can do with that money and I believe most of the parents there have diversified their kids' savings.

Onegai:
Nah, if you guys had been on the Newborn thread in Health section a few weeks back, we had a robust discussion, complete with expert advice from people in the financial/insurance world, on how to invest the money rather than leaving it in a Savings account to be earning a meagre 1 to 3% interest. There's more you can do with that money and I believe most of the parents there have diversified their kids' savings.

Onegai,you don't want banks to 'see' money?

On a serious note,there are better ways to invest the money.

thorpido:
Onegai,you don't want banks to 'see' money?

On a serious note,there are better ways to invest the money.

What better ways?. I hope you know that the money is not a bulk money at once. It has to accumulate over time. So, if one is putting 10k into such an account, that comes to 120k at the end of one year. So, what better ways can you invest 120k?.

NL1960:


What better ways?. I hope you know that the money is not a bulk money at once. It has to accumulate over time. So, if one is putting 10k into such an account, that comes to 120k at the end of one year. So, what better ways can you invest 120k?.

Well I'm not a financial expert but I know for instance that instead of putting money into a savings account,you can buy government bonds.
N120k is not too little to invest.

thorpido:
Well I'm not a financial expert but I know for instance that instead of putting money into a savings account,you can buy government bonds.
N120k is not too little to invest.

What iam saying is that will you not accumulate the money somewhere first before buying government bonds?. A child Savings account is not supposed to be an account that you dump a big lump sum into at once. It is suppose to be an account that you deposit a consistent amount at a defined frequency. So, if somebody wants to be depositing a fixed 10k amount every month into a child's savings account, should the person not do that but instead go and buy government bonds of 10k for that month and then at the end of the next month, he goes again to buy another government bond of 10k?. Do not forget that some banks demand for a minimum amount for government bonds and treasury bills.

NL1960:


What iam saying is that will you not accumulate the money somewhere first before buying government bonds?. A child Savings account is not supposed to be an account that you dump a big lump sum into at once. It is suppose to be an account that you deposit a consistent amount at a defined frequency. So, if somebody wants to be depositing a fixed 10k amount every month into a child's savings account, should the person not do that but instead go and buy government bonds of 10k for that month and then at the end of the next month, he goes again to buy another government bond of 10k?. Do not forget that some banks demand for a minimum amount for government bonds and treasury bills.

I understand what you are saying.I just used government bond as an example.Trading can be another use of that money.Like I said,I'm not a financial expert but what I'm emphasising is that putting that money into a savings account yields very little returns.

thorpido:
I understand what you are saying.I just used government bond as an example.Trading can be another use of that money.Like I said,I'm not a financial expert but what I'm emphasising is that putting that money into a savings account yields very little returns.

I perfectly understand what you say. Even for trading, you need capital to start. Can you start a trading with 10k?. My point is that you have to first accumulate before you now decide what you want to do. A child's saving account is an accumulation. There are people who have only 1k that they can afford to be putting in every month. What type of trading will you tell such a person to start with that 1k. Sound financial advise is that you accumulate first in a savings account and when it is something substantial, you move it to risk free investments like bonds or treasury bills. Do not forget trading can lead to serious loss and a wipe-out of the entire initial capital.

NL1960:


I perfectly understand what you say. Even for trading, you need capital to start. Can you start a trading with 10k?. My point is that you have to first accumulate before you now decide what you want to do. A child's saving account is an accumulation. There are people who have only 1k that they can afford to be putting in every month. What type of trading will you tell such a person to start with that 1k. Sound financial advise is that you accumulate first in a savings account and when it is something substantial, you move it to risk free investments like bonds or treasury bills. Do not forget trading can lead to serious loss and a wipe-out of the entire initial capital.

You're right but what if that N10k goes into some form of insurance plan?Still better than a savings account.

thorpido:
You're right but what if that N10k goes into some form of insurance plan?Still better than a savings account.

A good idea but what the insurance companies operate these days is like the child savings account also. They only throw in insurance cover and you know insurance has several 'hidden' legal terms and conditions that you might not understand. It is when it is time to redeem that some breaches will be shown to you. I have a child account for my kids. There are times i default on the monthly payment which is not a big issue to the bank. Whenever i become buoyant, i pay in arrears. The arrears payment is not because of the bank but because i want to meet the targeted yearly amount i have set. Iam sure if you try that with insurance, you had already breached the contract of not paying premium as at when due and therefore no cover.