Choosing Bank Accounts for Kids
A proper research should be done before opening banks accounts for your kids. Your research should be as specific as possible and it is important to read the fine prints. It is also desirable to read the product disclosure statements properly. Banks accounts for kids are relatively simpler than the adult accounts and the features and the fees are ones to look out for. Below are a few things to watch out when you decide to open bank accounts for your kids.
- Ensure that there is no monthly fees to operate the account
- Ensure that there is no periodic transaction fees
- Ensure that there is no or minimum account balance
- Check if there a cap on the maximum balance
- Ensure that the interest is calculated daily on the account balance
- Check if there is any introductory bonus interest rate and the limitations on that offered rate
- Check if interest is fixed or variable
- Check if there is additional bonus interest offered, if there are no withdrawals and regular deposits over a period of time
- Ensure that you receive monthly statements, online or offline
- Check that Internet banking is available for the account at no extra charges
- Check if opening the account would entitle your kids to any other incentives. Some banks offer memberships to kids clubs that teach kids to save if account is open with them
- Check if there are any catches, such as hidden fees, account switching fees and legal requirements and conditions
Sometimes, best accounts are only offered online and it is good to take advantage of great offers as long as you and your kids are comfortable with online accounts.
Setting up bank accounts will give kids opportunity to become more money aware, a sense of ownership and responsibility and the experience will teach kids to save. When bank statements are arrived, it is important to go thorough the statements with your kids to explain what it all means: the debits, the credits, the fees and the interest. Also get them to check online banking and let them ask questions.
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