piggy bank alternative
Separate accounts for kids are usually a good practical idea. When choosing and opening a child’s account, there are a few things you can keep in mind to avoid complications.
Why should my children have their own account?
Many children receive financial gifts from grandparents and relatives on various occasions. In addition to birthdays and Christmas, the awarding of diplomas is one of these typical occasions.
Often money goes to the piggy bank if it is not spent. A kids account is a good idea not to get lost or just to keep track of things.
It is true that money does not buy happiness. However, this means other people’s money.
George Bernard Shaw
With this kids giro account, kids can save money for big purchases and learn how to handle money.
What accounts already exist?
In addition to the Children’s Jiro Account, there are also savings accounts, call money accounts, and term deposit accounts. These are especially useful if you want to deposit money regularly in the form of a savings plan. Children often receive higher interest rates than adults.
What should I pay attention to when choosing?
You can consider the following points when making your choice:
- Account costs (no basic fees? Transfer and withdrawal costs?)
- Later costs as adults
- How and where can I deposit cash?
- Vending machine cash offer
By the way, the density of bank branches with the possibility of withdrawing funds continues to decrease. The free and practical alternative to this now is the many food discounts.
How do I set up a children’s checking account?
The age at which a child’s account can be opened depends on the respective bank, but it is usually possible from birth. But with some financial institutions, it can only be opened at the beginning of limited legal capacity, that is, at the age of seven. Important: Children cannot open the account on their own.
When legal representatives open it, both of you must identify yourself with your ID or passport, for example. If you are a single parent, you will need to confirm custody. To identify children, their birth certificates are required if they do not yet have an ID or passport. You should also have the children’s tax ID number on hand. Because your children are minors, you must sign the application as the person entitled to dispose of it.
You need these documents:
- ID cards, passports or birth certificates for children
- Tax ID for children
- ID cards or passports of legal representatives
- Custody confirmation
Another step towards independence
Soon after her transition to high school, we set up her own account for my daughter, where we are now transferring her pocket money. This makes sense, especially for separated parents, because pocket money delivery is not dependent on when or how often a child sees a particular parent.
I took my daughter with me to open the account so she could get all the correct information directly. Then we went straight to the ATM, where I explained the process to her step by step and finally let her open her EC card with the first discount. In the meantime, she is getting used to her newly gained independence and is happy to be able to automatically make one or two purchases with her girlfriends on a trip to town.
Child account features
Some banks allow parents to limit the amount of money their children can withdraw. There are special advantages when it comes to transfers: young children usually do not have their own access to Internet banking, and subsequent transfers by minors are subject to restrictions or are made only with parental consent. Service providers handle this differently. In all cases, an overdraft facility is not established for minors.
Who actually owns the money in the children’s account?
Even if the parents have a lot of control over the account and therefore the money: the money belongs exclusively to the child. Parents can’t use the savings for themselves, but only if they use it to fund a driver’s license for their children, for example.
If the account balance earns interest, you can apply for your children’s benefits for their accounts.
By the way, you can now also digitally apply for a children’s account (DKB U18) in the DKB. The prerequisite for this is that at least one of the parents is already a DKB customer.
If you would like more advice on the topic of pocket money, please watch our video on this topic:
What kind of mother are you or will you become?
Image source: Getty Images / kwanchaichaiudom
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