With children’s education cost rising at a fast clip, many of them would be borrowers even before they have started earning. In such circumstances, it is important that they are aware of how to manage money.
Archana Joshi has already started the process. Recently, she opened a bank account for her daughter (nine-year old) with a private bank. Archana says her daughter is yet to learn about the importance of saving, but wants her kid to learn the value of money to spend it carefully.
Banks like ICICI Bank, ING Vysya Bank, HDFC Bank and Kotak Mahindra Bank provide savings bank accounts for children (below 18 years). The average monthly balance to be maintained ranges between Rs 2,500 and Rs 5,000 for different banks. Banks also issue ATM or debit cards and personalised cheque books to children between the ages 7 and 18 years, as by then they are capable of grasping the basics of banking. Since the account is linked with the parent's account, its easy for them to monitor their kid's spends. If purchase is made through the ING kid's card, there are offers on books, food and toys. Whereas HDFC's 'Kid Advantage Account' gives free education cover of Rs 1 lakh in case of the parent/guardian's death.
|CATCH THEM YOUNG
|Charge for not maintaining required balance
|Daily withdrawal limits
above 7 years)
cover of Rs1 lakh
|Figures in Rs
Opening a bank account is not the only way you can help your child manage his personal finances. There are other options as well.
India Infoline has started a programme where children are taught money management at no cost. The course includes income, budgeting, savings and credit management. FLAME (Financial Literacy Agenda for Mass Empowerment), an IIFL initiative has designed and launched a certification course for students in the age group of 12 and 15 years and has tied-up with 20 schools in Mumbai to spread awareness.
Amar Ambani, head of research at IIFL says, “As of now we have 5,000 students on board. We cover topics like history and introduction of money, difference in regular and irregular income, identifying fake notes/coins, use of plastic cards and so on.”
Portals and websites launched by financial institutions can also help your children learn about finances in a fun way. The Reserve Bank of India's (RBI) website has a financial education section for kids, which explains the roles and functions of RBI and banking concepts like inflation, monetary policy through comic characters, puzzles and games.
Uday Sareen, country head – retail banking, ING Vysya Bank, says our Kiddzbank.com portal, has a ‘virtual bank’ explains the key functions of a bank through games and quizzes. “The portal helps children to learn about money management in a fun way to eventually equip them to be good at savings, spends and wealth creation.”
Birla Sun Life Insurance's 'NotJobsButPassion' platform helps parents to determine a child’s aptitude and possible career options through an online test. For example, your child is 12-year old and wants to become a doctor, this site will help you calculate how much money your child will require after 10 years in order to pursue his career.
Hence, make use of these customised products and services which will help enhance your kid's financial knowledge. This will not only equip him financially but also, help him better his financial plans independently in future.