How To Decide On The Best Savings Account For Your Child
Singapore has high standards of living, but all of this comes at a high price tag — costs of living here are rising year after year, so it’s not unusual for parents to start planning for their child’s savings account in the early years. This is especially useful because when your child is receiving yearly AngPow money, you’ll know where to store the cash just to get that added interest each year — that is, only if you’ve got a great savings account for your child. Read on to find out what makes a kids’ savings account and which are the best ones of 2019 that you can open for your child!
What Makes A Kids’ Savings Account?
Firstly, a kids’ savings account is unlike your regular savings account; it has no fall below fees. This means that even if the account falls lower than a particular amount, you won’t have to worry about being charged a certain fee. Secondly, a kids’ savings account generally has a better interest rate than the regular savings account, so you can hope to grow the money by a decent amount by the time your child is ready to take over the account by himself/herself. Thirdly, there’s no minimum age for your kids’ to be eligible for a kids’ savings account. So as soon as your newborn is born, you can go to the bank to open an account in preparation for the New Year’s Angpows that will be rolling in. Last but not least, a kids’ savings account also has kid-related benefits like discounts or even free insurance available — all these beats opening standard savings accounts by a mile.
CDA Account versus Kids’ Savings Account
Even if you have a Child Development Account (CDA), you can still open up a kids’ savings account for your child. CDA is where you store the baby bonus money and sometimes you can deposit some money into it so you can receive government rewards. However, CDA is reserved for your child’s expenses like education and healthcare; once the cash is inside the account, you’re limited by the government’s controls because you won’t be able to use it for whatever purposes that aren’t set out by them. As such, it will be good to have a kids’ savings account so you and your child will not only gain some interest over the years, but you’ll both have access to the cash inside it anytime you need it.
Types of Kids’ Savings Account in Singapore
There are many kinds of kids’ savings accounts available in Singapore’s banks; having to compare all of them can be overwhelming, so here’s a compilation of the top kids’ savings accounts for 2019.
1. ePOSBkids Account
POSB ePOSBkids Account has an interest rate of up to 0.1% and requires no deposit or a minimum balance. If your child is aged 18 years and younger, he/she is eligible to be an account holder of an ePOSBkids Account. Once your child turns 21, there will be a fall below fee of $2 incurred every month if the bank balance drops below $500.
2. HSBC Premier Lite Savings Account
At 1.85% interest rate and with a $1 initial deposit, the HSBC Premier Lite Savings Account offers the kids’ saving privilege to your child. However, this is account is exclusive to the parents who are existing members of HSBC premier banking clientele. To first qualify for the HSBC premier banking, you would need to have a balance of minimally $200,000, have a base salary of $15,000 or at least have a property loan of approximately $800,000.
3. UOB Junior Savers Account
The UOB Junior Savers Account has an interest rate of 0.1% but it also comes with a catch; users need to have a $500 initial deposit and the amount in the bank must not fall below $500, or else there will be a $2 fall below fee charged each month. For your first $350,000, you’ll get a 0.05 interest rate, and this will be increased to 0.1% when the amount rises above $350,000.
4. OCBC Mighty Savers Account
This might be one of the better deals in the bunch with a comparatively higher interest rate of up to 0.8%. Your child must be 16 and below to be eligible for this account and there is no requirement for an initial deposit and a minimum balance. Although the interest rates start at 0.05%, your child can easily earn a bonus interest of 0.35% when simply deposit at least $50 and refrain from making any withdrawals in that month. Then, as long as you have a CDA account, your child’s account will automatically gain an additional 0.4% every year.
5. CIMB Junior Savers Account
CIMB Junior Savers Account also has an interest rate of 0.8%, being one of the more generous kids’ saving accounts in Singapore. All you need to do is deposit $1000 upon opening the account and you’ll get to enjoy being paid the interest rate of 0.8% each year. Plus, given that there is also no fall below fees, the CIMB Junior Saves Account makes for an excellent choice for many parents.
6. Citibank Junior Savings Account
Like ePOSBkids’ Savings Account, Citibank Junior Savings Account also has an interest rate of 0.1% and does not require any initial deposit nor minimum balance. Citibank doesn’t impose any fall-below fees on their Junior Savings Account holders, so you can rest assured that you won’t need to deal with additional fees. However, if you’re a Citibank account holder, then you may be charged a service fee of $15 when the total balance of you and your child’s accounts fall below $15,000.
7. Maybank Youngstarz Savings Account
Among the other kids’ saving accounts, Maybank stands out from the bunch with the highest interest rate of 0.9%. While there is an initial $10 deposit required, there is no fall below fee. The base interest is decent in comparison to the others in the list, and you’ll even get to double and triple it when you fulfill some conditions. For instance, you can double your interest rate when you maintain a minimum daily balance of $2000 in your iSAVvy Savings Account while transferring $200 and more to your kid’s Youngstarz Savings Account within the same month. Then, if you also manage to spend a minimum of $800 on your Maybank Family and Friends card, your child’s account interest will triple in the month.
8. Standard Chartered e$aver Kids
Standard Chartered e$aver Kids has an interest rate of 0.25% and even though there is no initial deposit or minimum balance, users must deposit $50 monthly via GIRO. While this account’s interest rate isn’t the highest, it is relatively better, considering that there is no monthly fee; all you need to do is pay that $50 every month, which shouldn’t be an issue, given that your children are going to school and you do give them an allowance.
To apply for a kids’ savings account, you’ll just need to bring along both you and your kid’s personal documents. The administrative process is faster if you’re a current account holder at the bank, so this can be one of the factors to consider when deciding which bank’s kids’ savings account is the best for you — it’s always more reassuring to open an account at the bank you’re more familiar with! Finally, don’t forget to bring along the necessary additional documents like your child’s passport if he/she isn’t a Singapore citizen — and you’re all good to go!
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