Your children are never too young to start saving. When you instil in your child the wisdom and self-discipline in money matters, you are also cultivating their sense of responsibility from young. Such knowledge can offer tremendous value not only at a young age but also when they mature into adulthood.
One simple first step to help your children along this financial journey is to open a high-yield savings account in Singapore for them. How to select the best savings accounts for your little ones? This article will provide some insights.
Factors To Consider When Opening a Savings Account For Your Child
Savings accounts for children offered by different banks often come with slight differences in terms and conditions. To fully optimise the benefit of a savings account, there are three factors you should look out for.
1. Joint Account That Allows You and Your Child To Manage Together
The best savings account for children is one that is jointly managed by you and your child. When you co-manage the account, you can more effectively impart personal financial management knowledge to your child and ensure the financial goals are met. With proper guidance, your little one is less likely to overspend or fall prey to financial scams.
2. Minimum Deposits and Fee Waiver
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Every bank has different requirements when it comes to minimum deposits and charges like fall-below fees and early account closure fees. Always read the fine print to ensure you’re fully aware of what you’re signing up for.
For instance, the UOB Junior Savers Account requires a minimum deposit of S$500. If that is way above your budget, accounts like the OCBC Mighty Savers Kids Account or POSB My Account that does not impose minimum deposits may be better options for you.
3. Interest Rates and Account Perks
If you and your child are committed to maximising every dollar you put into the savings account, be sure to explore options that let you earn bonus interest on top of the usual 0.05%. The Maybank Youngstarz Account, for example, allows account holders to earn up to three times the base interest.
Also, be on the lookout for interesting perks that come with savings accounts for children. Many banks are offering complimentary benefits like free insurance coverage, bonus interest and free memberships that your child may enjoy.
Best Savings Accounts in Singapore for Children
If you’re ready to open an account with your child, we’ve researched the market and shortlisted some of the best savings accounts for children in Singapore that offer different features and benefits.
Citibank Junior Savings Account
The best part about the Citibank Junior Savings Account is that the initial deposit of S$5,000 has been waived. However, the per-annum interest rates are pretty basic and there is a S$15 monthly account fee.
| Account Balance | Interest Rates (p.a.) |
|---|---|
| First S30,000 | 0.05% |
| Above S$30,000 | 0.10% |
- Interest rate (p.a.): 0.05% to 0.10%
- Initial deposit: Waived
- Fall-below fee: None
- Monthly account fee: S$15
- Age limit: Until 18 years old
Maybank Youngstarz Account
Besides the base interest rates, you can expect to earn up to three times the interest when your child deposits the first S$30,000 in the Maybank Youngstarz Account. As joint account holders, you and your child will also be eligible for free Personal Accident Insurance coverage and for Hand, Foot and Mouth Disease Hospitalisation and Outpatient Insurance (child only).
| Account Balance | Interest Rates (p.a.) | 2X Interest | 3X Interest |
|---|---|---|---|
| First S3,000 | 0.1875% | 0.3750% | 0.5625% |
| Next S$27,000 | 0.3125% | 0.6250% | 0.9375% |
| S$30,000 | 0.3000% | 0.6000% | 0.9000% |
- Interest rate: 0.1875% to 0.9375%
- Initial deposit: S$10
- Fall-below fee: None
- Monthly account fee: None
- Age limit: Until 16 years old
OCBC Mighty Savers Kids Account
This joint account allows your child to deposit coins for free and enjoy priority queue service on Sundays at all Sunday Banking branches. Linking the account with an OCBC Child Development Account will also earn additional 0.1% per annum interest.
- Interest rate: 0.05% to 0.30%
- Initial deposit: None
- Fall-below fee: None
- Monthly account fee: None
- Age limit: Until 16 years old
POSB My Account
This is a straightforward joint account that allows you and your child to manage funds together for as long as you wish. Most fees and charges are waived until your child turns 16 years old.
Besides a S$1 gift deposit when you open an account, your child will also be entitled to free coin deposits and one-year free membership at POPULAR Bookstore and PAL Learning Gift Bundle.
- Interest rate: 0.05%
- Initial deposit: None
- Fall-below fee: None
- Monthly account fee: None
- Age limit: No limit
UOB Junior Savers Account
This is a joint account that can earn you and your child a base interest of 0.05% for the first S$350,000 and 0.1% for deposits above $350,000.
| Account Balance | Interest Rates (p.a.) |
|---|---|
| First S350,000 | 0.05% |
| Above S$350,000 | 0.10% |
You will also be awarded free insurance coverage of up to S$150,000 if you maintain an average daily balance of S$3,000 per month in the account over a six-month period.
- Interest rate: 0.05% to 0.10%
- Initial deposit: S$500
- Fall-below fee: S$2
- Monthly account fee: None
- Age limit: Until 16 years old
Image Source: iStock
This article was first published on ValueChampion and republished on theAsianparent with permission.
This article was first published on Value Champion and was republished on theAsianparent with permission.