In support of World Consumer Rights Day 2010 "Our Money, OurRights": financial literary should start young - CHOICE # 401

Financial literacy is never too young to start.

A sound concept of money management will stand a child in good stead for the rest of his or her life.

This is the objective behind a Consumer Council survey focusing specifically on bank savings accounts for children (aged below 18).

It is also part of the Council's contribution to mark the World Consumer Rights Day (WCRD) which falls each year on March 15. The theme for WCRD 2010 is "Our Money, Our Rights" designated by the Consumers International (CI).

The Council is on the Council and Executive of CI and will play host to the next CI World Congress scheduled to be held in Hong Kong in May, 2011.

In general, parents or guardians of young persons under 18 will act as custodians or trustees to open and manage the accounts for them, although in certain banks children above 11 can choose to open individual single accounts.

Highlights of some of the features in children savings accounts include:

• All 9 banks surveyed exempted the low balance fee for children accounts.
• 8 out of these surveyed banks charged an inactive accounts fee (normally $100 half-yearly) if no transactions are performed over a certain period of time (usually 2 years) and also if the balance falls under a specific level (usually $2,000).
• The initial deposit for opening account ranged from a mere $10 to $500.
• Some banks had ATM card or internet banking service which parents or guardians can apply for children to perform bank transactions - for checking account balance or deposit, cash withdrawal or transfer of funds. Some banks also offered internet banking to children themselves but in that case the access is limited to checking balance only.
• Furthermore, account holders might be recommended or introduced to some related financial products such as insurance products for children. They should consider carefully before purchase. They should clearly understand the nature of the products, the terms and conditions as well as the risks involved, as the products may involve long-term investment.

Besides savings accounts, there are in fact many opportunities for children to receive advice and guidance in financial management in daily lives.

For instance, instilling in children the concept of money through shopping and making price comparison with them, and familiarizing them with different kinds of payment methods (Octopus or cash).

Encouraging them to shop sensibly and wisely, e.g. preparing a buying list and budget beforehand, and rationalizing between "needs" and "wants" in goods.

Developing saving habits e.g. giving them a small amount of pocket money regularly, opening a savings account, setting saving goals, and teaching them calculation of interest and the importance of deferred consumption.