Which bank account is best for your child?

By Athenkosi Sawutana

One of the best ways to teach children about the importance of money is by opening a bank account for them. This way they will learn about saving and daily management of money. 

JustMoney contacted the most prominent banks to compare kids’ bank accounts, to help you decide which one might be suitable for your child.

Tip: To compare accounts from different banks, click here.

What does having a bank account accomplish?

In a tech savvy and highly digitised world, opening a bank account for your child teaches them about the importance of managing their money in a safe and secure place, setting up saving goals, and making their money go further by earning interest.

The benefits of opening a bank account for children are vast and there is no one-size-fits-all answer says Cowyk Fox, managing executive of everyday banking at Absa. 

In short, transactional accounts would typically allow accountholders to “manage” money, while saving accounts help people understand the power of savings, he says.

Involving children in banking decisions is a great way for them to learn about the importance of managing finances, Fox points out, and to help them develop a healthy relationship with money. 

A bank account comparison

Below is the list of kids’ bank accounts from South Africa’s biggest banks and their benefits:

Bank Name

Name of Account

Age

Opening fee

Benefits

Nedbank

Nedbank4Me

0-15 years

Free

  • No monthly fee
  • Free Nedbank ATM cash withdrawals and free card swipes
  • Cash deposits of up to R1 000 per month are free at any Nedbank ATM.
  • Free internal transfers and debit and stop orders
  • Free inter-account transfers and balance enquiries at self-service channels including the Nedbank Money app

 

Absa

MegaU

0-19 years

R10

  • Zero monthly fees
  • Unlimited free Absa ATM cash withdrawals
  • Unlimited free card swipes
  • Unlimited free point-of-sale cash withdrawals
  • Unlimited free prepaid top-ups
  • Free balance enquiries through any Absa channel (including branch)
  • Free emailed monthly statements
  • Free NotifyMe SMS / email notifications so customers can monitor activity and balances in their accounts

Absa

MegaU Savings Account

0-19

R50

  • As above, but interest is payable on the balance

 

FNB

FNBy

0-18

Free

  • No monthly account fee
  • No minimum balance requirement
  • A personalised FNBy contactless card that can be used to purchase goods using the tap functionality
  • The convenience of having an FNBy card delivered to you
  • Unlimited free card swipes
  • The ability to shop online safely with Online Secure
  • Free alerts when a transaction is made via inContact sent to both the child and parent or guardian
  • Get cash using Cash@Till® at major retailers at no extra charge.
  • The option for your child to manage their money on the go, wherever and whenever they want, with the FNB App
  • Free subscription to all digital channels, and zero data charges when using the FNB App
  • The option to re-direct fees to a parent or guardian’s account
  • Up to 1GB back in data on FNB Connect airtime, voice, data or SMS purchases from their FNBy Account

Standard Bank

(sum)1

0-16 years

Free

  • Unlimited free swipes at till points
  • 10 free electronic debit transactions a month
  • Cash withdrawals up to a value of R1350 at Standard Bank ATMs
  • Two  free cash deposits at our ATMs
  • Free balance enquiries on your phone
  • 50% off a TravelWallet card activation, loading and reloading
  • Get 250MB or R25 airtime for free every month

 

Things you should consider when opening a bank account for your child

As a parent or guardian, it is natural to lean towards the bank that offers the most for the lowest price. However, Yashen Singh, CEO of premium core banking at FNB says you must consider the following when opening a bank account for your child:

  • The controls that are in place for you, as parents or guardians, to have oversight of the account whilst your child is under 18.
  • Ease of service and channels available (app, online banking, branch etc) for both you, the parent or guardian, and the child.
  • The options that the bank offers the child beyond 18 (e.g. what are their student or graduate and professionals offerings?).
  • The options the bank offers to the family as a whole (i.e. ease of transacting between parent or guardian and the child’s account, benefits to parents for opening an account for a child etc).
  • The offerings/tools available to the parent or guardian and child over and above the transactional account that would be required throughout the child’s various life stages, for example educational savings, student loans, vehicle finance, unit trusts etc.
  • Also consider where you bank so you can seamlessly help manage your children’s accounts, and even do inter-account transfers when needed.

Children learn by doing, so the only way to kickstart their journey to forming great money management habits when they are older is to equip them with the tools to do so.

To hear some thoughts from children about money and saving, watch this video.

To learn how you can assist your child to learn about good money management, click here.

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