Kids in Singapore know they've got to think about the future. In between those battles with Pokemon and afternoons at the playground, they're worrying about the PSLE or how they're going to pay for university-or at least, their parents are.
While your kids aren't exactly plugging away at a 9 to 5 job (yet), they will receive some money over the years that will need to be stored in a bank account. Ang pao money, cash gifts from relatives and savings can earn a bit of interest when stashed in a savings account rather than stuffed into a piggy bank.
- What is a kids' savings account?
- Difference between CDA account and a kid's savings account
- Kids' savings accounts in Singapore
- ePOSBkids Account
- UOB Junior Savers Account
- OCBC Mighty Savers Account
- CIMB Junior Savers Account
- Citibank Junior Savings Account
- Maybank Youngstarz Savings Account
- Standard Chartered e$aver Kids
- How to apply for a young saver's account?
What is a kids' savings account?
So, why can't you just open a regular (ie. adult) savings account and stash your kid's money in there?
Well, there can be advantages to opening a kids' savings account, including the following.
- No fall below fee: Regular savings accounts usually charge a fee when your account balance falls below a certain amount. For instance, the POSB Everyday Savings Account charges $2 per month when your balance falls below $500. Your child is probably not going to have a whole lot in his savings account in the early years, so a kids' savings account would be the more economical choice.
- More attractive interest rates: Savings account interest rates in Singapore are generally dismal. Kids' savings accounts MIGHT pay more attractive interest rates than a standard savings account with the same deposit amount, which is great if you are hoping to keep your kids' money there over a long period.
- No minimum age: Some savings accounts have a minimum age that can range anywhere from 17 to 21. Kids' savings accounts have no minimum age, so you can open one even for a newborn. They do, however, have a maximum age, which can be anywhere from 12 to 18.
- Kid-related perks: Some kids' savings accounts dangle perks such as discounts at kid-related merchants or free insurance.
Why should you apply for your child if you already have a CDA account?
If your child was born a Singapore citizen, you would already have opened a Child Development Account (CDA) in which some of your baby bonus money was deposited.
In addition, you might be depositing money into your CDA in order to receive the government's dollar-for-dollar matching.
But a CDA account is a totally different beast, and even if you already have one, that doesn't mean you no longer need a junior savings account for your kid.
The money in your CDA account, whether deposited by you or the government, can only be spent on child-related expenses, namely the following:
- Educational expenses at child care centres, kindergartens, special education schools and providers of early intervention programmes
- Healthcare expenses at hospitals, clinics, pharmacies, optical shops and providers of assistive technology devices
All of the merchants you pay using your CDA have to be Baby Bonus-approved institutions.
Once you child turns 12, any money that remains in your CDA account will be transferred into your Post-Secondary Education Account (PSEA), where it must be used for secondary education.
Think of the CDA like CPF. You can deposit as much money into it as you like, but once that cash has gone in, the government will decide what you can or cannot use it on.
By contrast, a kids' savings account is like any other savings account in that the money is yours to use on whatever you want.
Kids' savings accounts in Singapore
|Kids’ savings bank account||Interest p.a.||Initial deposit and minimum balance|
|POSB My Account||0.05% base interest||None|
|UOB Junior Savers Account||0.05% base interest up to 0.1%||$500 initial deposit
$2 fee charged per month if average daily balance below $500
|OCBC Mighty Savers Account||0.05% base interest up to 0.2%||None|
|CIMB Junior Savers Account||0.2% base interest up to 0.4%||$1,000 initial deposit
No fall below fee
|Citibank Junior Savings Account||0.05% base interest up to 0.1%||None|
|Maybank Youngstarz Savings Account||0.01875% base interest up to 0.3750%||$10 initial deposit
No fall below fee
|Standard Chartered e$saver Kids||0.05% base interest up to 0.2%||None, but you must deposit $50 each month by GIRO|
POSB my account
You can apply for the POSB kids' account so long as your child is 18 and younger. A lot of kids in Singapore have this account due to POSB/DBS being the most popular bank amongst Singaporeans.
Heck, you yourself might even have had a POSB account as a child. Remember that squirrel?
Until your child turns 21, there is no fall-below fee. After the age of 21, the POSB Everyday Account's fall below fee of $2 when your balance falls under $500 will apply.
As a reward for opening this account, you get a measly $1 gift deposit and a free year-long Popular Bookstore Student Card Membership. Meh.
One huge drawback is that the interest rate is pretty dismal with a base interest rate of 0.05 per cent.
The next tier at $90,000 gets you another 0.05 per cent, as does the next $250,000 and $1,000,0000. But hey, if your child had a million dollars in cash you wouldn't be putting it into this account.
UOB junior savers account
This is another popular kids' bank account in Singapore due to the ubiquity of UOB. It's for kids aged 16 and below.
In terms of requirements, it's a little less easygoing than POSB's account, with a minimum deposit of $500 and a $2 fee if your account balance falls under $500.
But if you've got lots of money, the interest rates are slightly more attractive than POSB's. You get 0.05 per cent for the first $350,000, and the interest rate is increased to 0.1 per cent for amounts above $350,000.
That being said, for ordinary, non-millionaire kids' ang bao money, there isn't much difference compared to the POSB account in terms of interest, making this one of the stingiest kids' accounts out there.
OCBC mighty savers account
Finally, a local bank that offers a somewhat decent interest rate. The OCBC kids' account, which is open to kids aged under 16, does not impose a minimum deposit or balance.
The base interest rate of 0.05 per cent is the same as what the other local banks are offering, but your child also has the chance to earn bonus interest of 0.05 per cent when a minimum of $50 is deposited and no withdrawals are made in a month.
In addition, if you also have a CDA account, your child automatically earns an additional 0.1 per cent per year.
That brings the maximum amount of interest your child can earn to 0.2 per cent. A couple of years ago, the maximum amount of interest was a pretty generous 0.8 per cent.
CIMB junior savers account
CIMB's kids' savings account offers some of the most generous interest rates in Singapore.
The account is open to children aged 12 and below, and pays out an interest rate of 0.2 per cent per year for the first $200,000, 0.4 per cent for the next $800,000, and 0.2 per cent when your account reaches $1,000,000 and beyond.
There are no fall below fees or minimum deposit. The base interest rate is also relatively higher than alot of the other accounts.
This makes the account one of the most generous and most straightforward in Singapore. The only catch is that you need to make an initial deposit of $1,000, and the minimum amount to earn interest is $1,000.
Still, as there are no fall below fees, you can withdraw your $1,000 initial deposit anytime if you don't mind the fact that it will affect your interest payments.
Citibank junior savings account
This is an account aimed at parents who already have an existing Citibank account and wish to open one for their kids below 18 years of age.
Technically, Citibank does not impose fall-below fees on the Junior Savings Account holders. So if your child is the only one in the family with a Citibank account, there will be no fall below fee.
However, if you as a parent also have a Citibank account and the total relationship balance (ie. the total balance of parent and child combined) falls below $15,000, then a service fee of $15 will be charged to the parent's account.
The account pays out an interest rate of 0.05 per cent on the first $30,000, and 0.1 per cent on amounts above $30,000.
Maybank Youngstarz savings account
Maybank's kids' savings account, which is for children below 16 years of age, offers some of the most attractive interest rates in Singapore, but there are strings attached.
The base interest rate is 0.1875 per cent on the first $3,000, and 0.3125 per cent on the next $47,000. Any amounts above $30,000 will earn 0.3750 per cent.
As a base interest rate, this is pretty decent compared to some of the other accounts on this list.
If you satisfy certain conditions, you can double or triple that interest rate.
To earn double the interest rate for your child, you'll have to maintain an average daily balance of at least $2,000 in your own iSAVvy Savings Account, and transfer at least $200 to your child's Youngstarz Savings Account during the month.
If you do both of these things AND spend at least $800 on your Maybank Family and Friends Card during the month, your child will earn three times the interest in that month.
Assuming you manage to triple your interest in a month, your child will earn 0.5625 per cent on his first $3,000, 0.9375 per cent on his next $27,000 and 0.9 per cent on any amounts above $30,000.
The initial deposit is only $10 and there is no fall below fee, and the account offers other kid-related perks such as birthday privileges, hand foot and mouth disease hospitalisation and outpatient insurance and personal accident insurance for you and your child.
They've also got frequent promotions designed to attract kids. For instance, when opening a Youngstarz Savings Account, your kid gets a $20 POPULAR bookstore voucher.
Every year, your kid also gets a series of privileges when his birthday rolls around, like discounts on kid-friendly activities and a free scoop of ice-cream.
Another advantage of this account is that there is no fall-below fee, and the initial deposit is a mere $10, meaning you can open one even if you're broke or your relatives are very stingy with their ang bao money.
The account is open to kids aged 16 years and below.
Standard Chartered e$aver Kids
This account for kid aged 18 and below is, for lack of a better word, decent.. There is no minimum deposit, fall below fee, monthly fee or lock-in period.
However, there is a catch: As a parent, you must agree to pay $50 into the account by GIRO every month, which should not be a problem if you have school-going children to whom you give allowance.
The interest rates aren't the best in the land. You get 0.05 per cent interest on the first $50,000, 0.1 per cent on the next $150,000, and 0.15 per cent on amounts above $200,000.
How to apply for a young saver's account?
Applying for a bank account for your kid is pretty much the same as applying for one for yourself, except that you will generally need two sets of personal documents, your kid's as well as your own.
If you are an existing customer at the bank, the process is a bit faster and simpler, and you might even be able to apply online using your internet banking account.
In general, if you are not an existing customer, banks will require you to show up with your kids' ID in the form of his or her birth certificate.
If your child is not a Singapore citizen, you will need to bring along his passport. You might also have to bring along a document proving your address, such as a utility bill, telephone bill, letter from your employer's HR department or in-principle approval letter from MOM.
Finally, some banks will also require that you bring along your employment pass.
Finally, if there is a minimum deposit requirement, don't forget to bring the money along with you. If you don't have an existing account, you might have to bring this money along in cash.
You can also ask the bank if you can transfer the money from a different account within a number of days, but take note that not all banks will allow this.
This article was first published in MoneySmart.