Banks in India now allow savings accounts for kids who are ten years or older. Kids can operate these accounts, even though parents need to be partially involved in it as well. While most banks now offer various types of savings account curtailed to children, very few people in India take advantage of this feature. There are several important aspects that a child learns when he/she operates their own bank account from a young age. Here are some of the reasons why your kids should have their own savings accounts.
Understand the value of money
Most children are now aware of the importance and the value of money, since they are provided for by their parents. This is why many of them take money for granted from a young age. With their own savings account however, children start to realize the importance and value of saving money. They start to understand that money can be an asset when saved in a proper manner.
Avoiding unnecessary expenses
Kids will be more prone to spend all of their savings on useless items such as chocolates and similar products at first. However, you can encourage your children to save their money so that they can afford to buy something useful. For instance, your child may really want a bicycle. As a parent, you should advise your kid to save his funds so that he can afford the bicycle. This will teach them that savings can be useful in getting the things that they really want.
Basic idea of banking
Each and every person needs to be aware of the ways in which the modern day banking system works. With your child’s savings account, you are giving him/her a practical lesson on the same. They may not learn the intricacies of finance, but they will be able to comprehend how the bank computes interest on the savings that they have inside the account. This will further increase your kid’s desire to save money in order to earn greater interests.
Furthermore, calculation skills are also improved when the child manages such an account. They will comprehend just how much savings they have and how much more they need to save in order to reach their financial goals.
These are some of the reasons why opening such an account for a kid has become crucial. However, parents must be involved in this process as well so that they can guide the child to become mature in terms of money and finance. They must also select the type of savings account best suited for their child.
Understand the value of money
Most children are now aware of the importance and the value of money, since they are provided for by their parents. This is why many of them take money for granted from a young age. With their own savings account however, children start to realize the importance and value of saving money. They start to understand that money can be an asset when saved in a proper manner.
Avoiding unnecessary expenses
Kids will be more prone to spend all of their savings on useless items such as chocolates and similar products at first. However, you can encourage your children to save their money so that they can afford to buy something useful. For instance, your child may really want a bicycle. As a parent, you should advise your kid to save his funds so that he can afford the bicycle. This will teach them that savings can be useful in getting the things that they really want.
Basic idea of banking
Each and every person needs to be aware of the ways in which the modern day banking system works. With your child’s savings account, you are giving him/her a practical lesson on the same. They may not learn the intricacies of finance, but they will be able to comprehend how the bank computes interest on the savings that they have inside the account. This will further increase your kid’s desire to save money in order to earn greater interests.
Furthermore, calculation skills are also improved when the child manages such an account. They will comprehend just how much savings they have and how much more they need to save in order to reach their financial goals.
These are some of the reasons why opening such an account for a kid has become crucial. However, parents must be involved in this process as well so that they can guide the child to become mature in terms of money and finance. They must also select the type of savings account best suited for their child.
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