Savings Account For Kids.

[luckey007]

Dear friends,

Thinking about opening a savings account for the kid. There are lot of advertising about them mentioning gifts, schols,high interest and ect. I wish to ask you guidance as I do not have any clue. And general advice regarding the topic also will be highly appreciated .

Ps: My salary goes to BOC and standing order for other bank costs 50 rupees per tranfer.

Edited February 17, 2016 by luckey007

[kusumsiri]

Dear Luckey007,

I too was same situation some time ago and what I mainly considered the number of banks/accounts we open for our kids. They can handle this money when they reach 18 years. At that time we too may forget where we opened kids accounts for them, specially if we open multiple accounts in various banks. Sometimes we may not live to inform our kids about these accounts at that time and they may not able to find relevant documents too.

So I decided to keep all accounts (mine, wife's, kids) in one bank. That will be safest and convenient decision for kids in the future.

Think this will help for you too.

[sathyajithj99]

My father had a Seyl#n tikiri account for me. I don't know whether they still have that sort of account anymore. But I remember I used to get a lot of prizes from them like school bags, mugs, t shirts and board games like monopoly. I really liked that.

[luckey007]

Yes , there are lot of insentives. Banks try to give lot of things. What I bother is what will the benifit for the child when they get older. Sometimes these gifts deviate us from the main objective of opening an account for the kid. Main objective is to build a decent amount of money to start/boost their future. So no point if we get less amount of money in the end after receiving sometimes unwanted gifts. I am not offended on gifts and thats why I requested the forum members views regarding those accounts .

[Hoonigan]

The benefits of a minor's account come in the form of a better interest rate and the gifts the kid would get. The price you pay is that the cash cannot be touched for 18 years. Nowadays, judging by the adverts, I feel that the interest rate benefit is marginal and that the gifts are run-of-the-mill Chinese hamper.

Considering the term of the investment and the quality/amount of returns you get, I'd personally look at other medium or short term investments. This will of course require some level of self discipline but at least you will have more flexibility (you will have the money available if the child needs it before he turns 18) and hopefully a better return.

No kids yet so my perspective may not be entirely applicable

[luckey007]

Thanks for your view . So you do suggest there is no significant advantage in minor savings account and it just give a capital to bank. And yes with the depreciation and inflation the money the kid get in 18 years may be next to nothing! And there may be financial experts in this forum. So , what can we do to fulfill my objective(apart from giving good & sound education).

[luckey007]

<blockquote class='ipsBlockquote'data-author="sathyajithj99" data-cid="289455" data-time="1455708651"><p>

My father had a Seyl#n tikiri account for me. I don't know whether they still have that sort of account anymore. But I remember I used to get a lot of prizes from them like school bags, mugs, t shirts and board games like monopoly. I really liked that.</p></blockquote>

How do you feel the amount you got after you bcame an adult (I assume you are an adult , not like political experts in fb)Did you benefit from that money? And if you mind tell me how much your father saved and how much you got after 18 yrs. (You may say it as proportion or percentage if you not wish to disclose the real figures.) Finally is it really worth?

[hrm]

My father had a Seyl#n tikiri account for me. I don't know whether they still have that sort of account anymore. But I remember I used to get a lot of prizes from them like school bags, mugs, t shirts and board games like monopoly. I really liked that.

Yep they do have that still. In fact I become a father 2 months ago and my wife had a Seyl*n fixed account. Once the child was born they offered a Tikir* account with opening amount of 25K as a gift. I simply went with that and they seem generous with their offerings so far.

Had already given goodies like mugs, school bags etc.

Edited February 17, 2016 by hrm

[sathyajithj99]

Yep they do have that still. In fact I become a father 2 months ago and my wife had a Seyl*n fixed account. Once the child was born they offered a Tikir* account with opening amount of 25K as a gift. I simply went with that and they seem generous with their offerings so far.

Had already given goodies like mugs, school bags etc.

Congrats on becoming a father machan.

And nice to hear they still have that account.

[Hoonigan]

Thanks for your view . So you do suggest there is no significant advantage in minor savings account and it just give a capital to bank. And yes with the depreciation and inflation the money the kid get in 18 years may be next to nothing! And there may be financial experts in this forum. So , what can we do to fulfill my objective(apart from giving good & sound education).

I'm not a financial expert so please don't send your kid with a shotgun in 18 years

I would rather get in the habit of setting aside a particular amount every month (probably in a separate account/short term FD) and once you have enough, but small quantities of gold (24K coins/biscuits) and maybe a piece of land down the line. It will be better to have a mix of assets/investments rather than a chunk of just one.

Again, maybe a more learned member can suggest a better game plan.

[Crishan]

Dear friends,

Thinking about opening a savings account for the kid. There are lot of advertising about them mentioning gifts, schols,high interest and ect. I wish to ask you guidance as I do not have any clue. And general advice regarding the topic also will be highly appreciated .

Ps: My salary goes to BOC and standing order for other bank costs 50 rupees per tranfer.

Not an expert. But my 2 cents.

Firstly, forget the gifts. It's cheap marketing stategy. Will your kid have any benefit out of a bag/mug/bike etc when reached 18 years? My suggestions....

1) Example: If your salary is 100K, try saving LKR 5000/= monthly basis in a kids savings account in a stable bank at least with a Fitch ratting of AA- (Assuming the rate of interest is 5% per annum the balance after 18 years may be LKR 1.7 Million. You can use the follwing link to do the calculation)

http://www.thecalculatorsite.com/finance/calculators/savings-calculators.php

2) Approach a stable & customer friendly insurance service provider & sign up for a Kids education / investment plan. This will give a return after 18 years but will continue to fund the policy in case when the policy holder meets with an unforseen event. There are options to obtain an immediate fund in case of an emergency & after the policy matures upon child reaching 18 years. Discuss with an experienced insurance advisor & make sure you understand T&C well.

3) Obtain a personal / familly life insurance if you have not obtained already. This will be usefull in the event of an emergency or if you need to fund the wedding of your kid, give as a dowry to your daughter or for higher education.

Edit: Diversify your investments. Do not stick to one option. Have differnt options to cover long term & short term financial needs.

Edited February 18, 2016 by Crishan

[luckey007]

<blockquote class='ipsBlockquote'data-author="Hoonigan" data-cid="289519" data-time="1455791643"><p>

<br />

I'm not a financial expert so please don't send your kid with a shotgun in 18 years <br />

<br />

I would rather get in the habit of setting aside a particular amount every month (probably in a separate account/short term FD) and once you have enough, but small quantities of gold (24K coins/biscuits) and maybe a piece of land down the line. It will be better to have a mix of assets/investments rather than a chunk of just one.<br />

<br />

Again, maybe a more learned member can suggest a better game plan.</p></blockquote>

Thanks a lot.

[luckey007]

<blockquote class='ipsBlockquote'data-author="Crishan" data-cid="289522" data-time="1455795059"><p><br/>

<br /><br/>

Not an expert. But my 2 cents.<br /><br/>

<br /><br/>

Firstly, forget the gifts. It's cheap marketing stategy. Will your kid have any benefit out of a bag/mug/bike etc when reached 18 years? My suggestions....<br /><br/>

<br /><br/>

1) Example: If your salary is 100K, try saving LKR 5000/= monthly basis in a kids savings account in a stable bank at least with a Fitch ratting of AA- (Assuming the rate of interest is 5% per annum the balance after 18 years may be LKR 1.7 Million. You can use the follwing link to do the calculation)<br /><br/>

<br /><br/>

<a href='<a href='http://www.thecalculatorsite.com/finance/calculators/savings-calculators.php'>http://www.thecalculatorsite.com/finance/calculators/savings-calculators.php</a>'><a href='http://www.thecalculatorsite.com/finance/calculators/savings-calculators.php'>http://www.thecalculatorsite.com/finance/calculators/savings-calculators.php</a></a><br /><br/>

<br /><br/>

2) Approach a stable & customer friendly insurance service provider & sign up for a Kids education / investment plan. This will give a return after 18 years but will continue to fund the policy in case when the policy holder meets with an unforseen event. There are options to obtain an immediate fund in case of an emergency & after the policy matures upon child reaching 18 years. Discuss with an experienced insurance advisor & make sure you understand T&C well.<br /><br/>

<br /><br/>

3) Obtain a personal / familly life insurance if you have not obtained already. This will be usefull in the event of an emergency or if you need to fund the wedding of your kid, give as a dowry to your daughter or for higher education.<br /><br/>

<br /><br/>

Edit: Diversify your investments. Do not stick to one option. Have differnt options to cover long term & short term financial needs.</p></blockquote>

Thanks a lot.

Edited February 18, 2016 by luckey007