If you give your child weekly or monthly pocket money, chances are you’ve considered opening a bank account for her.
3 benefits to opening a bank account for your child:
1. Responsibility and financial savvy
An account can give your child a sense of control over her money and teach her responsibility and money sense. It also gives you an opportunity to teach her about saving, bank charges, transactions, and interest rates.
Cash can burn a hole in anyone’s pocket. Faced with a well-stocked tuckshop, what kid wouldn’t choose to blow her entire weekly earnings on a ton of snacks?
A bank account has the benefit of providing some distance between child and money, and can teach her to think before she spends.
3. Easy deposits
Finding the correct amount of cash and remembering to give it to your child weekly or monthly can be a pain. A bank account enables you to link your account to hers, and makes transfers quick, easy, and routine.
An added benefit is that family or friends living overseas could easily make transfers for birthdays or special events.
Which is the right bank account?
With so many options to choose from, though, it can get bewildering. Which is the “right” bank? Which one offers the most benefits? And most importantly, which one will give you free stuff?
In the table below, you’ll find a comparison of the offerings of five South African banks, which will help you to choose where to open your child’s first bank account:
What do parents have to say?
Lee-Ann enquired at a number of banks while deciding on the right place for her children’s accounts and ultimately chose Nedbank:
“They do a one day notice account for kids which offers great interest and free online transactions. You will need a children’s savings account linked to the one day notice account and it’s tax free up to R60 000.”
Mikaela chose Investec after trying various options:
“I tried Nedbank for my kids, but only my 16 year old could use the app, so I was always sent to the ATM to check balances. Also, it’s expensive to draw from other ATMs and Nedbank machines are quite scarce. Standard bank worked quite well, as I also banked with them, so I could link my kids’ accounts to mine, so it was easy to draw cash for them. We’re now with Investec (we all bank with them so it makes so much sense), so transfers are instant, the app is really user-friendly & they can earn interest in their own prime saver account.”
Do you teach your kids about money? Do they have a bank account? Tell us in the comments section below or email to email@example.com and we could publish your letter. Do let us know if you'd like to stay anonymous.
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