Factors that decide the best savings accounts for children

With the rising cost of education, it is difficult for parents to meet the educational expenses when their children grow. The best way to face this problem is to start saving for the child from very early on. Savings accounts for children will provide this opportunity to parents.

There are a number of factors that should be taken in to account to earn benefits   from a children savings account.

Factors that decide the best savings accounts for children

a)    Location of the bank- It would be a good idea to take the children with the parents when opening a savings account for them. Regular visits to the bank will help in inculcating a sense of savings in them. Therefore it is necessary that the location of the bank is close to the customer’s house. This will make the visits to the bank for transactions hassle free for the children.

b)    Transactions in children savings accounts are very less as the money is only deposited in the account and parents usually avoid withdrawing money from them. There are banks that charge fees for inactive accounts or accounts in which the rate of transaction is very low. Parents need to check such terms and conditions before opening an account. 

c)    Some banks also charge fees for opening children’s savings account. Some also ask for a minimum balance to be maintained in the account. This negates the benefits of opening a children’s savings account and also makes opening of a savings account costly.

d)    The minimum age requirement for children to be able to open a children’s savings account varies from bank to bank. The lower the age limit, better it will serve the purpose of saving for future since saving money over a longer period of time will help in earning greater benefits.

e)    Interest rates offered on the money saved for children also matters a lot when saving for their future. The better the chance to earn higher interest rates, greater will be the income.

f)    There are children plans that invest a part of the fund money in a children’s savings account. The money is invested in shares and this yields higher accumulation of principal amount.

With increasing advancement in the field of technology, banking has become hassle free. Online banking allows the consumers the flexibility to access their money from anywhere and at any time. When choosing to open a children’s savings account care should be taken to ensure the bank has online banking facilities so money can be availed from anywhere, irrespective of the location of the customer or the child.