A bank account is a great way of saving money and building up a fund for later in life. There are a lot of benefits to be had in opening a bank account for your child, however young they are.
Saving money is a great habit to develop and is something parents can help children to get interested in too.
As a parent, you can set up a bank account for your baby from the time they’re born and money can be added by you or grandparents to mark birthdays or special occasions.
But one of the main benefits of bank accounts is to encourage children to get into the saving habit themselves. If your child has pocket money and you’d like to get them to learn to save it, rather than spend it, then opening a bank account can really help with this.
In general, bank accounts are available for children to open from about the age of seven years old.
Opening a Child’s Bank Account
To open a child’s bank account, you’ll need to get an application form from the bank you’re interested in having an account with and fill it in.
It’s worth shopping around and looking at different account options as the interest varies between accounts.
Also, sometimes banks offer special promotions to encourage children to sign up, with free books, collectable toys or other goodies as incentives.
Proof of identity will be required and you’ll have to supply ID such as a birth certificate, passport or medical card.
It’s also normal these days for proof of address to be required too, to support the claim that you and your child share the same address and or the same surname.
For this, you’ll need a copy of an official letter with your name and address on it, such as a bank statement or utility bill.
Once all of these requirements have been fulfilled, the bank should be able to process the application and open the account.
Encouraging Regular Saving
Once your child has their bank account open, there’s plenty of ways in which you can help encourage them to get into the habit of saving money regularly.
If they’re craving a particular toy or computer game, then rather than buying it for them, you could encourage them to save money for it.
Whilst it’s being saved, get them to pay the money into the bank, rather than keeping it at home in a piggy bank.
Depending on the interest rate, they may not get a lot of interest on their savings, but it may well build up a small amount of interest and everything helps.
For Christmas presents and birthday presents, some members of the family, like grandparents or aunts and uncles, may wish to give money as gifts instead of toys, especially as children get older.
If they do give money, then this can be added to your child’s bank account rather than spent.