Kids savings accounts in Singapore

We all want our kids to grow into financially responsible adults — and a kid’s savings account is a great way to instil smart money habits early on. Your child may not be earning an income anytime soon, but this doesn’t mean that they won’t be receiving ang bao (red packets) money from relatives and friends every Chinese New Year or birthday.

Find out how kids’ savings accounts work, what to look out for and how you can apply with your child in this guide.

How does a kids savings account work?

A kid’s savings account may offer a higher interest rate than a standard savings account, but depending on the account, it may come with more withdrawal restrictions.

There is usually no monthly account fees, but do look out for a maximum age limit. When your child turns that age, the account will automatically switch to a standard savings account offered by the bank.

There’s also no minimum age requirement on most children’s bank accounts, meaning they can generally be opened when your child is any age. Usually, banks impose an age restriction on children being able to open an account themselves, so unless your child is above 16, you will need to open the account on their behalf.

How can my child benefit from having a kids savings account?

• Your kids can learn how to budget. Learning to budget is not just teaching your kids to put their money away, but also teaching them about spending needs and savings goals.
• Prepare your children to learn more about the economy. With an interest-bearing interest savings account, your child will learn about the concept of banking, interest rates, inflation, and how these are impacted by both the Singapore and global economy.

Factors to consider when choosing a savings account for kids

Here are some factors to consider when deciding on which savings account to choose for your child:

• Competitive interest rate. You may want to shop around for accounts with higher interest rates before making a decision. Some banks also offer promotional rates and other incentives, so it’s worth seeing what’s out there.
• How deposits are made. Teaching your kids to save regularly is a great financial skill. Start off by opening an account for your child and take him or her to the bank once a month to show them how to physically deposit their pocket money.
• Monthly fees. There is usually no account maintenance or fall-below fees for a kids’ savings account, but you should pay attention to any monthly withdrawal limits or fees.
• Minimum opening balance. Some kids savings accounts come with a minimum opening deposit, which may range from $500 to $1,000. So compare your options if you’re looking for an account that doesn’t have this requirement.
• Kids-related perks or educational programmes. Banks may provide attractive perks such as discounts and privileges at kid-related merchants, or even complimentary subscription for online educational portals.

Banks that offer kids savings accounts in Singapore

Compare the most popular kids savings accounts at a glance:

Note: The information provided above is accurate at the time of writing (30 April 2021) and is subject to change at the banks’ discretion.

Should I apply for a kids saving account for my child if I already have a CDA account?

To encourage couples in their decision to have more children, the Singapore government has a Child Development Co-Savings (Baby Bonus) Scheme in place to help ease the financial costs of starting a family.

If your child was born a Singapore citizen, you’ll be able to benefit from a cash gift and dollar-matching contributions that will be deposited into the scheme’s special co-savings account – the Child Development Account (CDA).

However, the CDA account is not an alternative to a kids savings account. Take a look at how they differ in this table:

As you can see, both the CDA and kids savings account are designed for different purposes. Money in the CDA can only be used to pay for educational and healthcare expenses at approved institutions, whereas funds kept in a kids savings account may be withdrawn anytime for any purposes.

So even if you’ve already set up the CDA account, it doesn’t mean that you no longer need a junior savings account for your child.

Pros and cons of kids savings accounts

Kid’s savings accounts have these benefits and drawbacks:

Requirements for kids savings accounts

Each bank sets its own rules and requirements when it comes to savings accounts for kids. In Singapore, most banks will require your child to be below 16 years old and you’ll have to be the child’s parent or legal guardian to open a kids savings account with your child.

You’ll typically be expected to provide the following documents:

Identification documents

• For child:
  • Singaporean/PR: A copy of your child’s birth certificate or NRIC (if they are above 15 years old)
  • Malaysian: A copy of your child’s Malaysian birth certificate
  • Other nationality: Passport
• For parents and legal guardians:
  • Singaporean/PR: NRIC
  • Malaysian: Malaysian IC or passport
  • Other nationality: Passport

Other required documents

• For Malaysians:
  • Proof of residential address (dated within the last 3 months), such as utility bill, telco bill, bank statements or government letters
  • Letter from current employer
• Other nationality:
  • Valid pass issued by the Immigration and Checkpoint Authority of Singapore
  • Proof of residential address (dated within the last 3 months), such as utility bill, telco bill, bank statements or government letters

Are there any caveats to look out for?

Parents won’t have to worry about their child losing money with a savings account, as deposits of up to $75,000 are insured by the Singapore Deposit Insurance Corporation by law. However, you should consider other risks that may come from managing a child’s savings account:

• Ability to limit withdrawals. As your child grows and is given more access to the account, they could fall into the habit of making frequent withdrawals from it. If you believe this may be an issue for your child, look for an account that limits access.
• Introductory interest rates. If the account offers attractive introductory interest rates, make sure to scrutinise the terms and conditions for the revert rate before committing to it.

*Do take note that the following deposit types are not insured: foreign currency deposits, dual currency investments, structured deposits and other investment products.

Frequently asked questions

• Can I open an account for someone else's child?

  Most banks require you to be the child’s parent or legal guardian in order to open an account for them. You will also need the child’s birth certificate and a form of identification for yourself in order to open a bank account for the child.

• Are there any fees to look out for?

  No, most kids savings accounts in Singapore do not charge any monthly fees or fall-below fees. However, if you decide to close the account within a short period after opening (usually between 3 to 6 months), you may incur an early account closure fee.