It was November 14 - Children's Day. Little Saahil got an exotic gift from his parents on the occasion.
No, not a computer. Not even a new set of jeans nor any of the latest editions of Harry Potter. His mom and dad decided to be different this year.
They gifted him ICICI Bank's Young Stars account.
Charity begins at home, as we have heard the adage so many times before. So does the habit of saving and management of personal finance.
Hence, along with human and social values, and good manners, Saahil's parents very rightly believe, you inculcate the practice and habit of money management in your child too. And according to today's changed scenario - leading one's life amid cutthroat competition, it is imperative that you teach your kid how to perform basic banking transactions.
With inflation rates spiraling and your children's demand skyrocketing, teaching them to value money and accordingly prioritise their needs will not only help you tighten your purse strings, but will also go a long way in ensuring that they do not spend the rest of their lifetime splurging on worthless ideas.
While ICICI Bank's Young Stars gives their young customers the facility of an international debit card after the age of ten, HDFC Bank's Kids' Advantage Account offers children this option once they attain the age of seven.
While the Young Stars Debit card allows children a daily withdrawal and spend limit of Rs 1,000, the HDFC Bank's debit card permits a daily spend limit of Rs 2,500 on the child.
Young Stars, which is a banking service for children aged between 1 day and 18 years, requires the account holder to have a minimum quarterly balance of Rs 500. It provides customers three options - savings bank account, fixed deposit account and recurring deposit account.
The Kids' Advantage Account offers parents the flexibility to transfer a fixed sum from their savings account every month to the child's account.
To complete the account-opening formalities, parents need to submit documents pertaining to the child's age proof, address proof and a self-cheque in case they are not visiting the bank while opening the account. One prerequisite is that the parents need to be savings account holders with the bank, in which they desire to open an account for their child.
In the case of HDFC Bank, parents need to invest a minimum sum of Rs 25,000 in the name of their child as a fixed deposit with a minimum term period of six months. A new Kids' Advantage Account that is linked to the fixed deposit will be opened in the child's name.
Parents can instruct the bank to transfer a standard amount (minimum Rs 500 from their savings account every month to the Kids' Advantage Account. However, if the balance in your child's fixed deposit falls below Rs 25,000, service charges will apply.
In addition to basic banking services, these accounts also extend services related to advice on investment options to parents. Both ICICI Bank and HDFC Bank offer their customers guidance on various savings and investment instruments.
Under Citibank's Junior Package, you, as a parent, can choose from debt/fixed income options like Government of India relief bonds, debt funds, monthly income plan funds or equity-based options such as balance funds, diversified equity funds and sector funds.
HDFC Bank's Kids' Account offers a free education insurance cover of up to Rs 1 lakh.
As a customer of ICICI Bank's Young Stars, a child can even transact online. By logging on to the bank's website, the kid can not only check his account balance, but also enjoy traveling through fun zones and special pages on the internet.
Citibank offers a denim look ATM/debit card for children over six years of age. Parents can set a prefixed limit on the card.
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