Good fortune — and good ol’ money parenting — awaits us as Li Chun inches closer! To prepare for the big day, we’ve gathered savings accounts that’ll give your kids the best headstart on their finances.
It’s (almost) that time of year again!
Li Chun falls on the beginning of Spring and is believed to be an ox-picious day to ‘grow’ one’s wealth, which in today’s context means making a well-timed deposit to you and/or your child’s bank account.
Even without checking the calendar, you’ll know Li Chun has arrived as there’ll be long lines across ATMs islandwide. While this tradition takes a page out of the basic money management handbook, it also serves as an important lesson for the little ones to start growing their savings from their ang bao money collection instead of spending it unnecessarily.
Why is it important to deposit Ang Bao money in a savings account?
If this is your first foray into money parenting, let us quell any jitters you may be feeling. Eastspring Investments’s recent study showed that over half of the 10,000 parents surveyed doubt if they’ve been successful role models for their kids when it comes to money management. But you’re definitely on the right track by opening and subsequently depositing their ang bao collection.
Not only does it help to build up funds securely with the help of attractive interest rates — a perk no piggy bank can offer — it also teaches them invaluable saving habits, the very foundation one needs to develop a good grip on their finances.
Moreover, when your child comes of age, you can easily hand the reins over to them as they start navigating the realm of online banking, learn to make their own deposits and handle transactions with a debit or credit card.
In time, they’ll be able to bump up their interest rate when they convert to a high-yield savings account once they reach the age requirement.
Best saving accounts for your kids’ Ang Bao stash
Here, we’ve put together the very best savings account for this occasion.
|Name of Savings Account||Interest Rate||Key Benefits||Minimum Deposit||Age Requirement for Child||Fees & Charges|
|POSB My Account||0.05% p.a. base interest|
Up to 0.25% p.a.
|Start an account with $1 gift deposit|
Able to convert My Account to a DBS Multiplier Account
No coin deposit fee (Pocket money-friendly!)
Exchange and save up to 13 different currencies
Get free POPULAR student membership for one year
No coin deposit fee
|No initial deposit required||No age requirement||Account fee of $2 per month for account holders above 16 years old|
|OCBC Mighty Savers Account||0.05% p.a. base interest|
Up to 0.20% p.a.
|Account holders get priority queue service on Sundays, at any ‘Sunday at OCBC’ branch|
No coin deposit fee
|No initial deposit required||Below 16 years old||Service fee waived|
|UOB Junior Savers Account||0.05% p.a. base interest|
Up to 0.20% p.a.
|Make monthly transfers to the UOB Junior Savers Account from an existing UOB account|
Convert Junior Savers Account to a regular UOB account at 16 years old
Get free insurance coverage that’s up to 100% of the account balance
|$500||Below 16 years old||$2 minimum balance fee if balance is below $500|
|CIMB Junior Saver Account||0.20% p.a. base interest|
Up to 0.80% p.a.
|Open your child’s Junior Saver account online|
Attractive base interest rate
|$1,000||Below 12 years old||Min. amount to earn interest: $1,000|
No fall below fee
Early account closure fee (within 6 months): $50
Monthly account fee: $1
|Maybank Youngstarz Account||0.1875% p.a. base interest||Earn up to 3X interest rate with Maybank Family Plus|
Account holders enjoy privileges during birthday month
Hand, Foot & Mouth Disease hospitalisation and outpatient insurance (if min. balance of $5,000)
|$10||Below 16 years old||Early account closure fee (within 6 months): $30|
No fall below fee
POSB My Account
Is there a more approachable financial institution than POSB?
A true blue icon that’s practically embroidered in our nation’s fabric, you may want to consider opening up POSB’s My Account come 3 February 2021. With no minimum initial deposit and age requirement, you can focus on growing your money — whether big or small — without incurring miscellaneous costs that could chip away at your savings.
The wide range of perks that comes with being an account holder beats the other contenders on this list, ranging from multi-currency capabilities and even a complimentary POPULAR membership for a year.
OCBC Mighty Savers Account
If you love beating the queue, this pocket money-friendly savings account gives you that privilege on Sundays (at selected OCBC branches)! You can also deposit coins at no charge and earn a decent 0.20% total interest rate without having to jump through hoops or have a million dollar balance.
Simply avoid making any withdrawals within the month and open an OCBC Child Development Account (CDA) to be eligible for the higher tier interest rates — easy peasy!
UOB Junior Savers Account
UOB Junior Savers Account gives you the opportunity to earn up to 0.20% interest rate — albeit with a sizable starting deposit of $500. You’ll also incur a $2 fee if your balance amount falls below $500.
On the bright side, account holders enjoy complimentary insurance coverage which practically incentivises you to save more — the higher your account balance, the higher the coverage amount. For added convenience, you can set up a monthly fund transfer to your child’s Junior Savers Account if you are an existing UOB account holder.
CIMB Junior Saver Account
At 0.20% p.a. interest rate, CIMB Junior Saver Account starting interest is on par with the highest interest tier on other accounts, in which you would typically need an account balance of over a million dollars to unlock (yikes).
Impressively, the account’s clear stand-out is its highest interest tier which totals up to 0.80% p.a. There’s no fall below fees to worry about. However, the required age is the lowest out of the bunch — 12 years and below — which means it’s best to open this account as early as possible before your child misses the window. There’s also the dreaded monthly account fee and hefty account closure fee to contend with.
Maybank Youngstarz Account
There’s much fun to be had as a Maybank Youngstarz Account holder. Besides enjoying a decent base interest, you’ll also be privy to exclusive privileges that your kids will surely love, such as POPULAR vouchers worth $30 and birthday deals at Pororo Park Singapore.
Complimentary insurance coverage for Hand, Foot and Mouth Disease Hospitalisation and outpatient care is nothing to sneeze at either. If you’re able to keep a considerably high but attainable account balance (qualifying amount is $5,000 or more), you can look forward to worldwide personal accident insurance coverage for both you and your child.
If you’re still having any doubts about your own ability to educate your kids about money, you’re far from alone in feeling this way. The Eastspring Investments study found that nearly half (43%) of the parents surveyed are keen on improving their own financial literacy to become a better role model for their children.
Get started on the right financial foot by checking out The Ultimate Savings Guide today.
Help yourself to better financial shape in the new norm, with SingSaver’s all-new Ultimate Savings Guide! Got your free copy yet?
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By Marissa Saini
Your friendly neighbourhood cat enthusiast who enjoys not being broke. Spend less, save more is the name of the game. Firm believer that being financially savvy is not about the destination, but the friends you make along the way.