Savings Account for Kids: Teaching Financial Literacy Early

Savings Account for kids or Minor Savings Account is a specific type of savings account that is meant for children aged from 1 day to 18 years. This account is jointly opened and monitored by the guardian/parent till the child attains 18 years. Once reaching adulthood, the account is usually converted into a regular Savings Account. Such accounts generally carry all the features of a regular Savings Account.

Teaching children about money management and the importance of savings from a young age can help in building a strong financial foundation for them. Let's understand the many benefits of opening a Savings Account for kids.

Before we move ahead, in case you're looking to open a Savings Account for yourself or your parents, consider Ujjivan SFB Digital Savings Account or/and Senior Citizen Savings Account (based on your financial goals and requirement). Enjoy higher interest rates, paperless account opening process, feature-rich Debit Cards and more!

What are the Benefits of Having a Savings Account for Kids?

1. Understanding the Value of Money

By encouraging children to deposit their allowance or gift money into a savings account, you teach them the importance of earning and saving. They will learn to appreciate the value of money.

2. Learning Financial Responsibility

Though during the initial years, as a guardian, you will be responsible for operating the account, still you can slowly start instilling the concept of financial responsibility into your kids. Children are curious; if you make the learning sessions interesting and playful, they may slowly start consuming the learnings.

 3. Appreciating 'Delayed Gratification'

Saving encourages delayed gratification by teaching children to resist impulsive spending in exchange for greater rewards in the future. This valuable lesson helps them develop patience and make informed financial decisions.

4. Inculcating a Habit of Goal-based Savings

Opening a Minor Savings Account may allow children to save for various goals such as buying a toy, planning a trip, or even donating to a charitable cause. It helps them understand the importance of setting goals and working towards achieving them.

5. Saving for the future

Opening a savings account for kids is an excellent way to save for their future. By depositing money periodically, you can ensure that it grows exponentially over the years, providing financial security when they need it most.

Teaching Financial Literacy Early: Practical Tips

Now that we understand the benefits of having a Savings Account for kids, let's discuss some practical tips for teaching financial literacy early:

1. Start with the Basics

Introduce your child to the concept of money by explaining its value and uses. Teach them about different denominations and how to count money. If your child is above 10 years, start explaining them how saving a portion of their travelling or other allowance can help in the long-term.

2. Set Savings Goals

Help your child set achievable savings goals. For example, they can save for a specific toy, game, or even a family outing. This will teach them the importance of setting goals and working towards them.

3. Involvement in Financial Decisions

As your child grows older, involve them in age-appropriate financial discussions and decisions. Let them participate in budgeting for family expenses or planning for vacations. This will provide practical lessons on money management.

4. Teach them about Budgeting

Explain the concept of budgeting and help your child create a simple budget. Do this as an exercise instead of imposing it. Encourage them to allocate money for different categories such as savings, spending, and giving. This will teach them the importance of prioritising their expenses.

5. Introduce the Concept of Interest

As your child's savings grow, explain the concept of interest and how it helps their money grow over time. Probably, they will learn this in their mathematics tuition/class, however using relatable examples at home may help them learn faster without any inhibitions.

How to Open a Minor Savings Account

You can open a Minor Savings Account with Ujjivan Small Finance Bank. The benefits are many - easy application and account opening process, higher interest rates, feature-packed Debit Card (available upon request for children above 10 years), and more.

Step 1: Visit Ujjivan SFB website 

Step 2: On the top menu, go to 'Savings Account'. From the drop down menu, click on 'Minor Savings'.

Step 3: Scroll down and click 'Request a Call Back'

Step 4: Fill out the form and click on 'Submit'

Our representatives will contact you to help you in opening the account.