But, times have changed. Over time, banks began to personalize savings plans for children and to extend account opening and operational flexibilities to minors to some extent. Meanwhile, the technological revolution has imposed operational changes in all spheres of life. Digital platforms have emerged on the scene offering digital products and services. In the midst of this scenario, banking operations have undergone dramatic changes where the digital revolution has forced banks to align and restructure their existing programs and adapt new products / services to facilitate ease of electronic transactions.
As we know, the demonetization of high value banknotes in November 2016 has driven the need for digital financial transactions. However, it is the unprecedented ongoing Covid-19 pandemic that has forced individuals, businesses and organizations to embark on digital platforms to stay afloat in terms of the execution of financial matters. The growing digital landscape encouraging faceless transactions has caused banks to restructure the parameters of their customer segmentation and it is here that young people in the 10-18 age bracket now feature prominently as the one of the customer segments of banks.
Speaking specifically of the student community belonging to the 10-18 age group, we saw them use social media platforms extensively and during the course, among other things, they face financial problems. This exposure to information increased their curiosity in knowing about financial matters. Even though many parents encourage their children to use digital platforms to conduct financial transactions under their supervision, ideally an independent bank account with a debit card engraved with their name would give them a sense of confidence and empowerment.
In fact, banks have already set up account opening facilities for these age groups (especially students), but operationally, bank officials would still discourage them from having account facilities. independent account. Most student account holders are denied access to digital services.
What is the procedure for opening an account under this system?
Students in the 10-18 age group can contact the bank branch. He must complete an account opening form which will be provided to him by the agency. Applicant must submit two recent passport size photographs, proof of identity / address, birth date certificate, school / college ID card and PAN / Form 60, if applicable .
In particular, for proof of identity and address, the student must submit Aadhaar. In support of the date of birth (DoB), a student can submit a birth certificate issued by the municipal corporation or Zilla Parishad or Gram Panchayat or a private nursing home or church or relevant school authorities. In addition, the passport, the transfer / exit certificate issued by the school / college / university, the certificate of completion issued by the school / college / examination boards / university and the grade sheet issued by educational institutions / colleges / exam boards / university are also acceptable as part of the program.
It should be mentioned that the account holder will not be subject to minimum balance fees. transactions in accounts are permitted without the need to maintain a minimum balance. No penalty will be charged even in accounts with a ZERO balance.
What is the amount of the initial deposit required?
Accounts should be opened with an initial deposit of 100 rupees or more. However, the maximum account balance should not exceed Rs. 50,000. If the account balance exceeds Rs 50,000, the account holder will not be allowed to withdraw money. Withdrawals from the account are authorized through the tutor.
What digital banking facilities are available to the student account holder?
The account holder will receive a free six-month free debit card / ATM card. In addition, the E-Banking / Mobile banking / SMS service will also be provided free of charge, provided that the holder of the student account provides his valid mobile number not linked to another account.
Here it should be noted that the account holder will be allowed to make a maximum of four withdrawals per month, including ATM withdrawals.
In addition, other facilities such as RTGS / NEFT, inter-agency transfers, check collection, etc. according to the service fee schedule, can be used by the account holder
Other terms and conditions?
The account holder may not open a term deposit or any other savings bank deposit account within the framework of the scheme. At age 18 or upon graduation, whichever comes first, Student-2 Savings Bank Account will be converted to General Savings Bank Account. At that time, the account holder must submit new passport-size photographs and signature specimens to the branch.
Now, a word to the parents …
Since the habit of saving is the backbone of wealth creation, then why not expose our children to financial products where they can save and lay the foundation for wealth creation for themselves. The first step in starting to save for your newborn baby should be to open a savings bank account, or a recurring account, to park savings and cash gifts. Parents and friends invariably bring gifts for the newborn, including money, etc. It is better to use these gifts. The gift money must immediately be placed in the account.
When your child is mature enough, link their pocket money to a savings account. As banking transactions are now purely tech-driven, it’s a good idea to expose your child to the latest technology and payment methods, such as mobile banking. And don’t forget to monitor your child’s drinking habits. A predetermined spending limit would ensure that the child does not overdo it.
Specifically, it is never too early for children to learn to manage money. The education of the child is incomplete without some lessons on how to deal with money. In order to teach your child the value of saving, you can’t give in to “I want this!” requests on site. Instead, gently remind the child that money grows at home in their piggy bank or in their bank account, and they will soon be able to buy whatever they want with their own money.
So teach your kids the value of money. It is up to you to see your children reach adulthood ready to face the financial challenges of life. So the theory is – earlier is better. In the short term, they can develop strong savings habits, learn to make smart purchases, and begin to understand the real meaning of investing. In the long term, we can help them avoid getting into debt. And by teaching the value of saving for the future, you, as a parent, can help them plan for their financial security.