A savings account is essentially an account where a part of the income is put away. Saving is essential for everyone and is the account that will prove useful when sudden expenses arise without any warning. These events may constitute illness needing serious surgery, among other things.
Savings accounts for children, however, are important for many reasons. When there is a child in the family, it is necessary to think about his or her future slowly. The child will grow up, and there will be educational needs aside from other needs. This is absolutely certain. A child will need education. Suppose from the very beginning, when the child is born, a savings account is opened, and money is regularly deposited into it, then by the time, the child grows up. There will be a cache of funds that can be deployed for the child's education. This has two advantages. Once the funds are there when they are needed, the family finances will not be under strain. The child account has been steadily funded and has a balance that could be utilised. The second and equally important advantage is that the education aspect can be planned since the parents know how much will be available in that account after a certain number of years. It then does not become necessary to see how much the parents can afford when the time comes. This often leads to a compromise in the quality of education. Having a corpus of funds saved over several years offers a convenient way out of this problem. Then there is the question of marriage, whether the child is a girl or a boy. Every parent wants to organise a grand affair, according to their earnings, for their child's marriage. Proper planning and deposits into the child's account will build up a fund that can be used for that purpose when the time arrives. This prevents a strain on the parents' finances during their child's marriage. Then there are the benefits that savings account for children offers. Banks offer special privileges and benefits for children's accounts. They include discount offers, among other benefits. The child is issued a special debit cum ATM card that the child recognises as his own. This awareness of having money in his name means that the child becomes aware of the importance of money. The inculcation of financial discipline is very important. It's a lesson that will have long term benefits. When the child reaches adulthood, he will be aware of this discipline, and this might save him from making disastrous financial decisions. Once the child is a little grown-up, he may wish to buy certain things. He must understand that he will need to save and wait for the money to accumulate. The child will understand that if he wants something, he must not spend without valid reason and must wait for the funds in his account build Parents must ensure that they do not sponsor the item desired by paying for it but teach the child to wait for it the money to accumulate. This teaches a sense of patience for the things desired. The child will learn that desiring does not mean immediate gratification. A lesson that will help him later on in his life. Financial discipline is extremely important, and teaching a child, this important fact is necessary. Having his own money teaches a child that if he spends, his money's gone. Frugality is an important lesson that a child needs to learn early on in life. Then there are benefits that banks will provide for a savings account for children. Some banks have a profit allocation system based on the funds in the savings account. And this is credited to the account. The growth in the account is a distinct benefit. It is, in a way, an income, and it makes sense to take advantage of it. The most important benefit is to the parents. A growing child will need more and more money spent on him. Every expense will increase as the child grows; savings account for children is one of the best hedges against such expenses taking a toll on the family's finances. When the child reaches his teens, there will be higher expenses for education and, in some cases, for a high-quality college or university education. If the savings in the child's account have been consistent, then the funds accumulated in that account can be used to defray such expenses. Then there are benefits that the child will see. Discounts which he can use when buying his favourite item. The fact that he can use his own account to buy makes a child feel important and confident. Some banks also offer freebies, such as free tickets to certain events. The child will feel that he has importance in this world. Overall, opening a savings account for children involves investing in the future of the child. There is no better way than to open a savings account in the child's name and show him how the thing works. Of course, adult supervision is always necessary until the child reaches a certain age. But it is a wise way to save money and gain from the special provisions some banks make for such accounts. Parents, too, gain from this.
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