Opening a bank account for your child is an important step in their financial life. In addition to being prepare your futurewill also be convey to you the importance of saving and managing your money efficiently. So, if you haven’t already, start planning to open the account for your child.
When to open your child’s account?
The sooner you open an account for your child, the better.because in this way the probability of increasing the profitability of your savings is greater. The account opening process is very simple and the presence of the child is not required, just present the minor’s identification document (the account holder), the your identification document (legal representative), as well as proof of address and profession. Also read: Financial education: What to teach at each age
How important is it to open an account for your child?
As we indicated earlier, opening an account for your child is a very important step in developing their financial skills. First because you are preparing a sock for when your child reaches adulthood, he will have some money available to achieve certain goals such as Erasmus, buying a car, taking a gap year after college, among others. Then, why are you instill in him from an early age the importance of saving and efficient money management.If your child is over six years old, take it with you to the bank to open an account and explain its importance. He will be excited to be a part of this process. In addition, there are other actions that can sensitize your child for this theme. For example: Talk about money openly with him; Take him shopping with you and explain your purchasing decisions; Assign him an allowance to manage; Set him savings goals; Give him books and games that address the topic of financial literacy.
What are the account specifics for a child?
As a general rule, accounts for minors can be opened at any timethat is, from the time the child is born until the age of 18 and they are account maintenance fee free. As for the minimum constitution amounts, they depend on the financial institutions. In this type of account, the holder is always the smallestand the father, the mother or both of their legal representatives until the child turns 18 years of age. To deposit money into your child’s account, you can choose to go to the counter or make transfers from your account to theirs. To be more comfortable for you, you can choose to make scheduled transfers to your child’s account. Also read: 8 ways to teach your little ones to make financial decisions
Where to invest your child’s money?
To monetize your child’s savings, opening a current account is not enough, should consider choosing a product where to invest the money.These days, interest rates on traditional term deposits are very close to zero, even with the announced rise in the Euribor rate, interest on deposits remains very low and as the inflation rate is higher, the money you put into these products devalues. So where to invest your child’s money?The secret is diversificationthat is, it can put some of your child’s money in a traditional depositnot least because it is protected by the Deposit Guarantee Fund (up to 100,000 euros). Part of the money can be invested in other products with greater profitabilityfor example:treasury certificates. This product has guaranteed capital and a slightly higher yield than traditional term deposits. In this case, it periodically receives the interest amount in the current account and at the end of the investment term, it receives the entire amount invested in the account.investment funds. In this option, there is capital risk, that is, you may lose part of the amount invested, however, the return can be much higher than that of risk-free products. If you decide to opt for this product, remember that it will have to be in the name of an adult. Also read: 5 financial tips that your children will not forget
A professional writer by day, a tech-nerd by night, with a love for all things money.