Financial literacy is not a core topic in a majority of schools in Malaysia. Last August, a veteran economist Yeah Kim Leng told the Free Malaysia Today that financial literacy should be introduced as a subject in schools. Whether or not this proposal will push through, parents still have the responsibility of teaching kids the value of money. One of the best ways to do that is to familiarize kids with how a savings account works. As a parent, here are tips to keep in mind when opening an account for your children:
- Take advantage of bank account promotions. Because of the strict competition among banks, they tend to have promos now and then. For example, there are Malaysian banks that offer special cash rewards for children who do well on their school exams.
- Opt for the bank with a high-interest rate. It is important to have an interest-bearing account given that the child’s bank account will likely be in place until he achieves adulthood. Some banks also offer bonus interest if you make no withdrawals during the calendar year. You can benefit from this as it encourages you to save more and avoid withdrawals.
- Choose the bank with an online account management. Sign into an online account so you can monitor the savings. You can show the figures to your child for him to have an idea how the interest value grows. It’s also a good way of helping your child become more motivated about saving.
- Apply for an account with the lowest monthly maintenance fees. When you have an interest-earning account, it is given that the bank will require you to have a minimum balance. It costs banks to maintain your accounts. Thus, it is normal for them to need a minimum balance so they can make money in return.
- Take your child to the bank. Doing so will give your kid the feeling of being in charge of money matters. Let them talk to the people at the bank who could better explain some banking words, such as deposit, withdrawal, transaction, and account balance.
If you’re all set to open a bank account for your child, head to the local bank near you and submit the requirements. In most cases, banks only require a birth certificate and an identity card. Also, check if the bank requires any initial deposit.
There is no such thing as starting too early in saving. Remember that savings account grows because of the miracle of compound interest. If you want to make the most out of compound interest, begin as early as possible.