Should your child get a bank account?

2019-10-25
THE PUNCH Newspaper


A child’s bank account can help your child get used to managing money, with the help of restrictions designed to make sure he does not overspend.
The benefits of a children’s current account include:
No overdraft facility: A hard limit to how much cash they can withdraw a day- the daily withdrawal limit will usually be different depending on whether they have a debit card or a cash card.
Money management: Online, mobile and telephone banking all help your children mange their money their way. They can check their balance, view their statements and send money to their savings account (where applicable). Children aged 11 and 12 may need permission from their parent or guardian to access mobile banking.
Text and email alerts: Children’s bank accounts can also come with text and email alerts to let them know if a payment has been missed, if they need to pay money in to cover a payment or if their balance has gone below zero (this may happen if a payment goes out and there are insufficient funds in the account- there won’t be a charge).
Earn interest: Money in children’s bank accounts will usually earn a small amount of interest.
No automatic debit card: A parent or guardian will normally need to give permission for their child or ward to have a debit card ( provided they are under 16).
Understanding children’s bank account
Teaching children how to manage money is critical to ensuring their future economic success, and parents can begin with the easy step of opening a bank account in their child’s name. However, even many adults have trouble handling their finances, so it is not surprising that people worry about overwhelming their children too early on with a bank account or debit card.
Fortunately, personal banking has become more convenient than ever, making it possible for parents to open accounts for their children to monitor their activity and teach them sound financial habits whenever they feel ready.

 

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