Last December, Asmyta Tiwari understood the real meaning of independence. Within a month of turning 18 she told her dad to get her a debit card (as promised) and an independent bank account. She got a bank account (with her dad as a guardian) at 13, a Facebook account at 15 and a mobile phone at 16. But she feels more independent and proud at 18, as she owns a debit card of her own!
Asmyta had to wait till 18 to have a banking relationship of her own. But your younger kids may not have to wait that long. The Reserve Bank of India has just allowed 10 year olds to operate a bank account without any guardian or adult supervision. Banks will be free to set their own age limit for such accounts and decide on the facilities like debit card, cheque books to be offered to kids over 10 years of age.
As I read this news last night, my first reaction was “there aren’t going to be any takers for this” probably because as parents we are too scared to let our kids handle money on their own. Rather we assume that they are too young to do such a thing on their own. But as I spoke to parents in my extended family and friends, I realized that most of them were willing to let their kids experience the responsibility of managing money.
Ruchi Ray a mom to boys aged 14 and 10 doesn’t have a bank account for them but is willing to open an independent account if it’s easy for them to understand and operate it. As a father, Nitin Bagga, wants her 12 year old daughter Jahnavi to handle money responsibly through her bank account but would ensure that there are adequate withdrawal limits on usage of debit card. Another doting mom Sonal Sareen will soon open a bank account for her boys who are 12 and 6. While she may open an independent one, but would like to restrict the amount she deposits in their account.
To be sure that these accounts are not misused, your bank will certainly set a withdrawal limit on debit cards. You can also put adequate safeguards such as sharing internet banking passwords, or sharing each other’s bank account statements to encourage them to be transparent about how they are using their account. Let them feel independent and proud, but ensure that they know it comes with a baggage of responsibility.
Be in touch with your bank or check your emails regularly to know under what rules the bank will allow your kids to manage their account. Till then, keep reading this blog to know how you can teach them about money.