Features and benefits of a student savings account

Students’ savings account is a great financial tool that helps in inculcating savings ethics in students at an early age. These accounts are a good way to teach the youngsters the value of money and make them self dependant. 

Benefits of students’ savings accounts 

1. With the help of students’ savings account a child learns to save money.
2. With regular contributions, the parents too can save for the future educational expenses of the child.
3. Students’ savings account is free from maintaining a minimum balance. They are usually zero balance accounts. A zero balance in the account or less than the minimum balance does not call for penalties.
4. Irrespective of the balance in the account interest rates are paid.
5. A minimum deposit is not required when opening a students’ savings account. 

Students’ savings account vs. other accounts 

The general features of the student savings account are: 

1. The accounts get interest rates accumulated in them.
2. Passbooks and ATM cards are supplied as per need.
3. The first five to ten transactions are free.
4. Drafts and cheques can be drawn from the account.
5. Regular deposits can be maid.
6. Funds are accessible and can be withdrawn any time. 

There are certain differences that make the student’s savings account differ from the other accounts.   

1. The student savings accounts do not require maintaining a quarterly minimum balance. While in savings accounts, a quarterly minimum balance needs to be maintained and penalties are charged for lower balances.
2. Normal savings account requires a minimum deposit at the time of opening. No such criteria are mandatory for opening a students’ savings account.
3. Transaction charges are free or very nominal. In savings account, the first few transactions are free while higher charges are levied after them on every transaction made. 

Shortcomings 

One of the eligibility criteria’s for opening the student’s account is that the applicant must be a student. Although the age limitation for opening a student’s account is decided by the bank policies but in general a wider age range of students are allowed   to open this account. However it will be difficult for a 46 year old student to get access to a students’ savings account. 

Free transactions are limited to only six in a month. Charges although nominal, are levied thereafter.

To prevent parents from staying away from money in their ward’s accounts, there is a limit to the amount of fund that can be saved in these savings accounts.