When mobile police officer Clement Ajokubi was hacked down by armed robbers at his duty post on the highway in Awka on July 1, 2008, his major concern as he bled all the way to the hospital was who would cater for his four children.
His regret, recounted by a friend who met him in hospital before he gave up the ghost, was his inability to save for his children’s future.
When Ajokubi’s benefits of about N500,000 were paid to his wife, his friend advised the woman to buy equities (shares) in the name of the children.
Mrs. Ajokubi bought shares in First Bank. A year later, the stock market crashed and the price of shares dropped. She was not well informed about children’s bank account which could have placed them in good stead.
These days, however, families are discovering the best way to guarantee the future of their wards. Even when the cost of living, education, and housing is on a steady rise, it makes good sense to save for your children early.
The best way is to open a children’s bank account and build it up while time permits. Out of post primary school, your ward may wish to go to university, do a business, or engage in any other enterprise.
By this, parents will also teach their wards an invaluable lesson of early life saving, and the importance of making good financial decisions.
There are several children’s products and services designed across financial institutions. But the crucial question is which bank to choose.
The first step is to research products and compare rates of interest, plus any other benefits an account offers. The best children’s accounts fall into instant access accounts, fixed rate account, or other variants that fit your motive.
An instant access account is flexible, and allows withdrawal money whenever desired. Most account holders are issued with a card to withdraw money.
Interest varies on accounts like these. If you want your child to save money over a long period, a fixed rate account offers more security as your money continues to grow at the same rate of interest in 10 years as it did when you opened it.
Some banks offer bonuses if you reach a certain amount; a good incentive for children to save as much as possible. There may be an option for the interest to be paid monthly or annually.
The only downside to an acess account is general interest rates. If they rise during the fixed term you may get less return than other accounts, though this is generally deemed less of a risk by parents who want a secure return on a child’s savings.
Zenith Children’s Account, otherwise called ZECA, is a special deposit product for the education of children aged between 0 and 16 years.
The incentives include an interest higher than for regular savings account, end of year gifts, access to investment and portfolio management services at concessionary charges, plus the account can be used as loan collateral.
The initial deposit is N10,000 for existing customers, N25,000 for non-customers. Withdrawal, which can be done in any branch nationwide, is once a quarter. There must be a minimum balance of N50,000.
ZECA gives access to e-banking and allows standing orders for the payment of school fees.
Guaranty Trust Bank Smart Kids Save (SKS) account is available in two categories.
The first is for ages 0 to 17 years. The second, for ages 13 to 17 years, is also called SKS Teen account.
The account holder requires a minimum opening/account balance of N1,000, and is entitled to a free branded gift item when an SKS account is opened with a minimum N10,000. Gift items are provided when milestone points are achieved.
Structured as competitive tiered interest rates between 2.5 and 3 per cent (the more you save, the more you earn), the account allows lodgments of cheques, drafts and dividends into the account, subject to a maximum of N100,000 per instrument.
Periodic lodgments can be made into the account through standing order/automated direct debits.
The account holder gets invitation to SKS Fun events, games, educational support for homework and study, other fun activities and additional benefits to only SKS Teen.
When an SKS account holder attains the age of 18, the account can be converted into a regular savings or current account, with the young saver as authorised signatory.
From the age of 13, an SKS Teen account will be opened for the teenager which comes with a free Trendy Teen MasterCard (issued upon parent’s request) so the child can learn to manage money responsibly.
