How to choose the best bank account for your child

Financial management is an essential life skill, and a bank account is a helpful teaching tool for young savers.

We investigate various children's bank account options, and the factors you should consider when selecting one.

Tip: It’s never too early to start making good money choices. Find out more about savings and investments.

Banking on your child’s future

There’s no perfect time to open your child’s first bank account, an FNB spokesperson points out. “Some parents open an account when their child turns one, and start saving on their behalf. Others wait, and open the account together, as part of their child's financial training.”

South Africans are notoriously bad savers. Accounting firm Deloitte’s South African Investment Management Outlook for 2023 reported an alarmingly low savings rate of 0.5% – another reason that encouraging youngsters to save can only pay dividends.

Having a bank account allows children to enter the world of financial literacy and security, notes Colleen Leclercq, managing director of Connect EQ, a consultancy focused on developing high-quality connections and positive cultures.

Leclercq also believes that a bank account can help youngsters acquire wealth-building skills.

“The sooner children learn the basics, the more likely they are to establish good savings and investment principles,” she explains.

Financial skills go beyond saving, and kids with bank accounts learn about budgets, investments, safe online transacting, and tracking their spending, she notes.

“In addition, I believe it instils a sense of responsibility and independence,” Leclercq says.

Finding the personal touch

To pick the best solution for your child, it's crucial to look beyond monthly costs and benefits.

If family members have accounts at the same bank, they get access to family-oriented benefits, such as loyalty programmes, discounts, and free inter-account transactions, says Nick Nkosi, managing executive of transactional banking at Absa Everyday Banking.

It’s important to choose an account with an appropriate level of control for your child, he adds.

While some accounts automatically grant full autonomy to a child at age 16, others keep parents involved until the child turns 25.

Several banks now also offer Shariah-compliant youth accounts for Muslim clients.

As part of your decision-making, also consider what your child’s bank will offer when they enter the next phase of their life and need a student or young adult account, Nkosi advises.

Getting down to account specifics

Bank accounts for children are structured to meet specific needs.

“Youth customers benefit from free day-to-day banking and free embedded benefits,” states Nkosi. “This prevents monthly fees from depleting savings from gifts and pocket money.”

While most children’s bank accounts attract no monthly maintenance fees, and specified transactions are free, the perks differ significantly from bank to bank. The table below provides a useful comparison.

Tip: It’s advisable to teach youngsters the basics of money management from an early age. Read here about savings and investments.