As a parent myself, it is never to early to teach your children about the concept of savings. Even though the children might not understand the meaning for the savings, but if we as the parent, make savings as a part of daily fun activities, the kids will definitely enjoy it and appreciate it more. Experts have came out with many methods and systems that can encourage the children to learn the savings concept, but personally I'm practicing the Money Jar method. I will elaborate more about this Money Jar method in my next article.
So now, we've got some savings for our children and what do we do with it? Some people will invest the money in unit trusts or stock market. There's nothing wrong with this, but the savings quantum must be quite big to make a big difference. For small savings, naturally we are looking for a savings account for children.
There are plenty of children savings accounts in the market. The common features of these children/junior savings accounts are:
- Higher interest rate as compared to normal savings accounts
- Limited number of withdrawal per month
- Limited withdrawal method (normally OTC withdrawal only)
- Low account opening sum, as low as RM 1
- Rewards / Incentives, i.e. cash rewards for excellent exam results, free personal accident coverage etc.
Below is the list of junior savings account from most of the major Malaysian commercial banks. The junior savings accounts from Islamic banks are excluded in this list on purpose to minimize the list from expanding too much.
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From this comparison document, it is quite obvious that if you have savings for your children in the amount of less than RM100,000, you should have a serious look at RHB Junior Savers Account which pays 3.05% p.a (as of 13 Sept, 2011). for any amount less than RM100,000. It is worth to note that this account only allows 1 withdrawal per month and doesn't come with other fancy rewards and incentives as other commercial banks.
If you have savings for more than RM100,000 for your children, Affin Bank's Junior Saver account is the runaway winner here with the interest of 2.85% p.a. (as of 13 Sept, 2011). The only drawback is the limited branch network of this commercial bank.
So, there you go with the recommended junior savings account, depending on the savings amount that you have for your children. Don't procrastinate and make a move now for your children' future!
Alternatively, you may have a look at SSPN which provides better than fixed deposit interest rates, AND tax relief. Head here to read up more on SSPN.
2 comments:
Thank you. This is the right information I need before I drive down to CIMB tomorrow to open a savings acct for my daughter. I'll walk to RHB instead. Thanks again for the information!
Thank you for finding my article useful for you.
Please do let me know if the interest rates have changed once you've signed up the accounts for your children.
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