Opening them an account not only provides them with something for later but also encourages them to split their pocket money into a pot to go towards toys and things they want ‘now’, while putting something aside for the long-term. All those extra jobs, money from granny or reward money can be collected in a savings account teaching them that the money doesn't have to be spent right now.
But with the wide selection of banks out there and added to that the fact that both Dutch Opa and English grandparents living in Singapore will also be depositing money. It makes choosing an account to deposit their savings hard.
There are also numerous questions to ask yourself, Do you want to open a savings account at your own bank in your current expat country? If you choose this option, will you be able to transfer the money at a later date if you move to another location.
Or if you choose a bank back in your home country, Can you access it and the funds easily whenever you want?
Also, it’s not always easy when living overseas and you don’t have an address to open an account in your home country. With onshore children’s accounts, you normally have to open the account by having a relative do it and then you fund the account by sending the money across. However then currency conversions and costs are another item to consider, a savings account abroad mean bank transfers with possible charges and variable exchange rates.
Some other things to consider when opening an account for your children:
- Location Is the bank convenient for you to get to? If your children embrace the idea of their own savings accounts, they may want to make frequent trips to the bank. Consider a neighbourhood bank, one on a common route that you travel, or inside your local supermarket to keep the trips from turning into a hassle. If you frequently go to the bank, it may be very helpful to open your child's savings account at the same bank to coordinate visits.
- Fees & Requirements Find an account that doesn't have monthly maintenance fees or minimum balance requirements. In addition, make sure there is no limit on the number of small deposits. Also watch out for banks that charge fees for inactive accounts and read all the small print before opening the account. If you are using a bank that provides a free savings account tied to your account, find out what happens if you move your account to another bank. Can your child still keep his account open?
- Type of Bank The first bank you check will likely be your own bank. If they don't have an account that meets the needs of your child based on fees and requirements, you can explore an online bank.
- Ages of Children Based on the age of your child, your account needs will have different requirements. For savings account for a baby, you or grandparents may only deposit gifts of money. For an older child, they may want to put money in and take it out to buy a toy. For a savings account for a teenager they may want the ability to link it to a checking account. Consider how you will use the account when selecting the type of bank and account requirements.
- Interest Rates Don't forget to look at the interest rates on the account and compare savings accounts, two banks may have very different interest rate structures.Many banks and credit unions offer significantly higher rates on child accounts on low balances to encourage saving.
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