Help your children become financially savvy
You've set the example, taught them about the cost of things and that money is earned by doing chores. Still, you stress about whether your child will be able to handle money once they're older.
Instead of giving in to unnecessary stress, it's time to take teaching your child about money management to the next level by considering opening them bank accounts, advises Keith Robinson, managing partner at Focus Consulting Group.
"A bank account not only gives your child a sense of control over their own money but it also teaches them about saving, bank charges, transaction fees and interest rates," Robinson explains.
However, today's youth want more than just trustworthiness from a bank account. They want products and services that allow them to tailor their needs in a fast-paced, technology-driven world, adding extra pressure on you to choose the right account.
Khathu Ramoliko, sub-segment head at FNB Gold, says this segment of the population has access to a vast amount of information through digital channels and tend to be more informed than people assume.
So, in choosing the account you need to consider several factors - how digitally savvy is the bank (and your child), whether the account is tailored to your child's needs and how the bank charges work, among other things.
According to the latest Sunday Times Generation Next Youth survey, FNB, Capitec, Standard Bank and Absa are the top four coolest banks among South African youth, largely due to their digital services and tailored offerings.
We take a look at the youth accounts offered by the Big Four to help you compare and choose the best one suited to your child's financial needs:
FNBby is for children between birth and 17 years old. The account offers free and unlimited electronic payments and transfers as well as card payments. It offers an annual interest rate of up to 6.5% with a minimum deposit of R100.
The account can be used in the same way as any other FNB account with access to alerts via SMS or e-mail. Your child will also have access to a library of educational videos as well as free online banking and app subscriptions. The account is opened and linked to the parent's account.
Capitec, recently voted best bank in SA and third-best in the world, does not have a specific account designed for young people, but it's Global One account allows users to have four additional savings accounts.
You can assign funds to any one of those accounts, control access as well as transfer to and from the main account. Opening an account in your child's name requires you, the parent, to be a Capitec client.
Standard Bank (sum)1 can be opened for children from birth to 16. It has no monthly fees and cash withdrawals at Standard Bank ATMs, cash deposits, electronic transfers, cellphone balance inquiries and transfers to Standard Bank savings and investment accounts are free.
You also have access to the Kidz banking app that teaches different aspects of money management. You don't have to be a Standard Bank client to open the account but must be a customer to access the Kidz app. The bank also recently launched "Sorted", a digital platform for the youth that combines banking, lifestyle and social functions.
The app is linked to a prepaid debit card used to pay for products or services in a closed or open community. A closed community would be a primary school where the parents will have some control, while the open community would be a recent graduate connecting with the community and perhaps getting help from mom and dad once in a while.
Lincoln Mali, head of card and emerging payments at Standard Bank, says although Sorted has been created to serve the 18 to 23-year-old market, the bank believes it will appeal to parents who want their school-going children to experience some financial independence. Where a Sorted account is used by a minor, parent monitoring of financial transactions can be enabled.
Absa's MegaU account is for children from birth to 19 years old. You don't need to bank with Absa to open the account and it's not linked to a parent's account. There are no monthly fees on cash withdrawals at Absa ATMs, first R500 deposited at an Absa ATM or cash acceptor, debit card purchases, notifications and internal debit orders and stop orders.