Bank Accounds for Kids

Bank customers can choose from different types of checking, savings, and special accounts. Some banks offer all types while others have only checking and savings accounts on offer. Savings accounts are offered to individual customers and are good for adults, children, and teenagers. There are minimum requirements such as residence and to be of the age of majority. For an individual account, customers should fill in an application form and present an ID such as a passport or driver’s license. Financial institutions are also interested in the source of funds, whether in the form of superannuation payments, government benefits, rental or investment income, savings, salary, etc. Some banks ask about the types of expected activities, for example, money transfers, clearing checks, check credits, withdrawals and deposits, and others. If applying for a joint account, both applicants should fill in the application form. Holders are allowed to deposit and withdraw money up to a certain limit. The main drawback is the low interest rate compared to certificates of deposit and money market accounts. Only checking accounts have a lower interest rate than savings ones. Some customers opt for a basic checking account that allows them to make monthly payments towards loan and mortgage balances. There are many benefits to opening a basic account, and one is that holders enjoy low-cost money transfers and check cashing. There are different types of products, and one example is Swiss bank accounts. The drawback is that this product earns no or little interest, i.e. it is not an option for people who are looking for safe ways to invest.

Banks also offer money market accounts that come with a fixed interest rate and minimum balance requirements. Customers can make a limited number of withdrawals. The range of minimum deposit also varies of $5,000 - $10,000. Banks advertise competitive interest rates, but there are transaction limits. Time deposits or CDs are another option for customers who agree to keep their savings in an account until maturity. The term varies from 1 month to 10 years, and a longer term means a higher interest rate.  There are also health savings accounts that allow deposits but have contribution limits. In addition to checking and savings accounts, there are investment instruments such as commodities, cash, bonds, mutual funds, and others. Some investment instruments are risky (Forex trading) while others are safe to use.

A cash reserve or overdraft protection account is a solution for those who want to play safe. There are many beneficial features such as telephone and online banking and an unlimited number of transfers between different accounts. Customers enjoy high interest rates on deposits of $10,000 and more. One of the main benefits is that there are no monthly service fees. Finally, there are individual retirement accounts that allow holders to earmark funds and earn pre-tax income. Holders can place assets such as funds, bonds, stocks, and other assets. The contribution limit may be higher for holders over the age of 50. 

Reference:

YourLoan.ca

TD Bank