Minor accounts: Unlock savings, investment opportunities for kids

How parents are wisely investing their children's monetary gifts to foster financial literacy, inculcate saving habit

- Sashind Ningthoukhongjam

Vir Tiwari's wallet was so full that it couldn't take it anymore. For the six-month-old boy, it wasn't particularly a bad situation. However, his father, Ekansh Tiwari, the associate vice president of currencies at Natwest Group, certainly had a task on his hands. For, Tiwari had to find a way to lock the surprisingly large amount the newborn received during his mundan-a Hindu ritual that involves shaving off a baby's first hair or birth hair.

The solution, though, was simple. Most major banks offer minor bank accounts that the parents can open on behalf of their children. Think of it like a piggy bank with additional perks like online banking.

One can also let their money grow by investing in instruments such as fixed deposits, stocks, and mutual funds. "Opening an account was quite a straightforward process since my father worked in Punjab National Bank (PNB)," said Tiwari.

His daughter Asmi has ₹1 lakh in fixed deposit (FD) and ₹25,000 in her bank account. The Tiwaris opened an FD for their son. They put ₹50,000 in the FD, and ₹15,000 is lying as a balance in the account. PNB sent them a debit card, but they returned it to avoid the temptation of withdrawing money from the account.