Bank accounts for children are a popular way to save for the future and educate children on the importance of money awareness. Just like other types of savings account, there are two main options available: easy-access accounts and regular savings accounts. Easy-access accounts allow you or your child to deposit or withdraw money whenever, though there is a lower rate of interest. Savings accounts offer higher interest rates, but may block access or stipulate a certain saving habit for you to achieve the highest interest rate.
Most student bank accounts come with special features that cater to student needs. In addition to debit cards and swipe technology, these accounts may offer attractive incentives such as discounts on internet, food and rail travel. Overdraft facilities are very popular with today's generation of cash-strapped students, and the best ones do not charge interest, however interest does usually apply at some point after graduation when the student bank account changes into a graduate bank account.
It is important that students only take what they need. Don't let flashy gifts and introductory promotions blind you from the real deal. Check the overdraft terms to see if there is the option to increase the overdraft when needed. Many student bank accounts offer tiered overdrafts, and these are good if you want more control over how much you are borrowing. The two best things you can get with a student bank account is 0% borrowing and flexible overdraft limits.