The bible says,”Teach a child the way he should go, and in the end he will not depart from it”. This principle applies to everyone, more so about an individuals financial discipline.
Parents need to create time to train their children on the importance of proper financial management. This can be achieved through many ways including encouraging children to start saving their allowances at a young age.
In order to instill a savings culture into their children, parents can support their children in opening a savings bank account,or in some instances diversify the investment portfolio for their children.
The following factors are of great importance to both the parent and the child when it comes to opening a bank account or making investments for any child:
- What is the purpose of the account is it to enable the child save some of his or her allowance for the sake of it, or is to teach the child on the importance of saving?
- Will the savings made be directed towards enabling the parent buy a gift, clothes, books, or even pay school fees for the child?
- Whatever the reasons, when looking for a suitable bank account for a child in Kenya, it is always necessary for a parent to consider the following:
- What is the minimum opening balance
- How often will the bank provide bank statements
- Documents to be furnished up front by the parent
- Whose responsible for managing bank transactions
- Proximity of the bank to the parents residential of working environment
- Interest rates
- Minimum operating balance
- Service fee upon every transactions, be it deposits or withdrawals
- The incentives offered as part of the package. For example, birthday card, free piggy bank, discounts at certain shopping outlets.
- Whether an ATM card will be provided
There are several banks in Kenya that have provisions for guardians or parents to open a bank account for their children. However lack of knowledge of the banking requirements for such accounts can prove problematic for parents of guardians.
It is therefore essential for one to do a thorough analysis of the banking requirements to make an informed choice. It is also advisable for the child for whom the bank account is being opened to be involved in the bank selection process. This will in the long run keep the child motivated enough to give towards the savings account.
For those seeking do diversify on their child’s investment portfolio,it is advisable for parents to get advice from financial experts.
All the best as you make an informed choice.