Your children might already be familiar with piggy banks as a savings tool but, as they grow older and their money starts accumulating, you might want to consider opening a bank account for them. Cash they receive from relatives, by doing the neighbours’ chores, as a reward for a good report card, for their birthdays, and as a weekly allowance can quickly add up, but can also quickly evaporate as children are often tempted to spend it on toys and sweets or whatever they see in a targeted ad on TV.
South Africa’s major banks each have a solution tailored for juvenile savings plans. The application process is pretty straightforward and much the same as opening a regular account. You only need your ID document, and your child’s birth certificate and proof of residence, and must sign on behalf of your child. Most juvenile accounts are set up with a parent as the custodian, however, the parent doesn’t need to bank at the same financial institution.
As with most other accounts, your child’s savings at the bank will be subjected to certain charges as outlined in this Banking Fees Guide for 2018. There are a range of free transactions; most fees come from using the services of another bank. In collaboration with Hippo.co.za, we provide a brief overview of the bank accounts specifically designed for youngsters.
Standard Bank (sum)1 account
- No monthly fees; no income required
- Unlimited free swipes at all till points
- Eight free electronic debit transactions a month
- Two free withdrawals and deposits a month at their ATMs
- Free balance enquiries on your phone
- Kidz Banking app
A full breakdown of their fees can be found here.
Absa MegaU account
- No monthly fee
- Free cash withdrawals at Absa ATMs
- First R500 cash deposited at an Absa ATM or Cash Acceptor is free
- Free debit card purchases
- Free prepaid top-ups through Absa channels
- Free Absa ATM balance enquiries
- Free internal debit orders and stop orders
- Free account activity notification via SMS or email
A full breakdown of their fees can be found here.
FNBy account
- No minimum balance required
- Unlimited card swipes
- Unlimited electronic payments and transfers
- Access to monthly product discounts from FNB partners
- Access to a library of educational videos on their app
A full breakdown of their fees can be found here.
Nedbank 4me account
- No monthly fees, but you need to maintain a minimum balance of R20
- Free swipes and withdrawals at till points
- Free balance enquiries online and at ATMS
- Higher interest rates than normal accounts
A full breakdown of their fees can be found here.
Not only will opening a bank account for your child keep their money safe and teach them from a young age how banks work; it will also prepare them for a financially fit future, as they’ll gain some understanding of the importance of responsible spending habits and managing their financial obligations (which could include paying a Personal Loan and credit card on time in the future).
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