Savings account for children and their need

Various financial institutes like banks offer its customers accounts that pay interest. These accounts help customers save a part of their liquid money and also earn interest on the money saved. This is the reason why such accounts are called   savings account. These accounts are good for fulfilling short time needs and provide safety of principal. 

Ideally one should start saving as soon as he is able to earn. In case of parents the best time to start saving for a child is when he is born. This helps in avoiding the savings to fall prey to inflation risks. Moreover additional interest amounts are also earned. 

How to open a children savings account 

Some simple steps are to be followed to open a savings account for a child-

1. Search for high yield savings account. This means different banks offer different rates of interests on the savings accounts to attract more customers towards it self. It is best to look for savings accounts in banks that offer better interest rates. Sometimes during different festive seasons, banks offer greater interest rates for a certain period of time. Grab the opportunity.
2. Look for accounts that need minimum balance to be maintained quarterly. The less the requirement for minimum balance better will be the features for the savings account. Sometimes children savings accounts have zero balance need. Search for the banks offering such accounts.
3. A guardian or director for the children account has to be mentioned. For children below the age of 18 years any one parent or both is taken as the director of the account who will be monitoring the transactions made from the account.
4. Make your child visit the bank as this would make him understand the process of transaction to some extent.
5. All information given to the financial institute should be correct and up to date. 

Why should one open a children savings account?  

The benefits of opening a savings account in the name of your young child can be summed up as follows-

1. This helps in saving for the child’s need from an early age.
2. Parents are able to face the risks of inflation as the child grows.
3. It helps us to have access to some liquid money always in hand.
4. The account also earns interest.
5. Secures the future expenses of the child.
6. In most banks the savings accounts are secured and irrespective of situation the bank has to face you always will get your money back. 

Now comes the important point as to how does the child benefit from the savings account in his name. If the child is allowed to operate the savings account, he will have a first hand experience of the way money transaction takes place in banks. A discipline to save for the future will also get inculcated in him. The child will understand the need and advantages of saving. 

Savings accounts are the best and the most traditional method of saving money as well as earning interest on them. They not only prove to be an asset but a great help when your child requires financial help for his higher studies or even to settle down. This saved money can also be used for social purposes like marriage.