Children's
Bank Accounts: What To Look For?
Piggy banks offer instant access and convenience
but they don't offer any freebies or interest. Banks and building societies are out to woo your children from an early age, but how do you choose the right account for them?
This
is a good opportunity to talk to children about managing money. Interest
rates and incentives vary. Check how often interest is paid into the account
- most pay on an annual basis. Early withdrawals may forfeit interest
and banks tend to be stingier than building societies.
Do
your homework together
Find
a site together and compare what is available. Remember, an extra 2% interest
will make little difference to a tiny balance but cash incentives for
keeping a certain sum in the account over a fixed period can boost savings.
Don't ignore freebies; children love the gifts, magazines and birthday
cards that most financial institutions offer.
Choose
a convenient branch
Generally,
internet banking and supermarket accounts aren't open to children. You'll
find you actually have to visit the branch in order to show. It's useful for older children to have a bank within
walking distance so they can make deposits and withdrawals on their own.
Remember, not all accounts give cashpoint cards to under-18s.
Credit
where credit's due?
Parent-controlled
debit cards for shopping on-line have just arrived in the UK. They work
like a prepaid phonecard. They do, however, have inbuilt restrictions
so you can control where your child goes virtual shopping.
Cashing
in
Banks
and building societies offer three types of accounts. Under-eights accounts
are usually in the name of the parent or guardian. Eight to 12 year-olds
can make deposits and withdrawals on their own and will have their own
passbook. Accounts for 13-18 year-olds usually have cashpoint cards and
chequebooks for over-16s. Overdrafts aren't given to under-18s so even
with a cashpoint card, your child can't go into the red. Post Office accounts
for children now function just like any other account.
Disclaimer
While every effort has been taken to ensure accuracy at time of publication,
this information may be subject to change. Always consult your financial
advisor.
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