In the recent guideline by the Reserve Bank of India, minors above the age of 10 years are allowed to open and operate savings bank accounts independently, if they so desire.

A savings account or fixed deposit or recurring bank deposit account can be opened by a minor of any age through his/her natural or legally appointed guardian.

Most of the banks offer additional banking facilities like internet banking, ATM/ debit card, cheque book facility etc., subject to the safeguards that minor accounts are not allowed to be overdrawn and that these always remain in credit.

State Bank of India has come up with two accounts specially designed for kids called PehlaKadam and PehliUdaan.
Most of the features come with 'per day limits' to ensure that they spend the money wisely.

Some of the basic features of both the accounts:

• Interest at 4.00% p.a.calculated on a daily balance.
• Transferability of accounts to any SBI Branch without changing the account number.
• Nomination facility is available and recommended.
• Specially designed branded Passbook issued free of charge.
• Inter Core charges NIL for transfer transactions.

Should You Open?

The only reason one can open this account is that it might help to inculcate the habit of savings in children at a young age.

Beyond this you may have to maintain a minimum balance, apart from the hazard of maintaining another account. Go for it only if you want to form a savings habit in your children.

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