The Reserve Bank of India (RBI) has consistently been tweaking its children’s savings bank account policy over the last few years. A decade or so ago, there wasn’t even an option for us to operate our own savings bank account.
However, the RBI’s new policy now allows even children below the age of 10 to own and operate a savings account. It all started in the year 2014 when banks were allowed to offer savings accounts to minors under the age of 18.
Banks like ICICI Bank and State Bank of India (SBI) also offer two differentiated accounts based on the age of the minor: one for children under the age of 10 and the other for kids between the age of 10 and 18.
Also Read: How to save tax on up to Rs 17,000 on savings account interest
While children between 10 years and 18 years can operate their savings account independently, the accounts held by minors younger than 10 years will be jointly managed by the parent.
These accounts will turn dormant once the account holder turns 18 years of age after which it will have to be switched to a regular savings bank account.
The schemes offered by banks will provide all the banking services such as debit cards, cheque books, passbook and internet banking, among others. Therefore, it is of utmost importance that the account activities and transactions are supervised regularly.
For any clarifications/feedback on the topic, please contact the writer at viswanathan.v@cleartax.in
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