Parents with young children prefer to open a child’s savings bank (SB) account over other investment options, a recently released survey has revealed.
The ING Zing Survey, held during the last one month, with feedback from 4,067 parents across the country, added that investing in fixed deposits (FDs) is the second-most preferred choice. The survey said that the most important reason for parents to save has been children’s education.
“Among parents with older children, insurance and FDs came out as the most popular methods of investment,” the survey said, adding that for younger children, 58 per cent of parents save below 10 per cent, while for older children, 75 per cent parents save between 10-20 per cent.”
A majority of parents believed that children only above 15 years should be allowed to operate a bank account independently, the survey revealed, which may be seen in the context of RBI recently allowing banks to offer independent SB accounts to children above 10 years.
The ING Zing Survey further revealed that pocket money given to a child tends to rise along with the child’s age, and it is to be known what children really earn these days. “On an average, children below 10 years get either no allowance or less than 500 per month, those between 15-18 years get below Rs 1,000 per month,” the survey said.
“Last year, over 50 per cent of parents were not in favour of giving out pocket money, but this year, we see that two-thirds of parents are in favour of giving pocket money to the child above the age of 10,” the survey said, adding that over 80 per cent parents feel that their child is more knowledgeable about savings and more than one-third of parents believed that their child is “smarter about saving” and understand the value of money better than they were at that age.
“Parents who see themselves as spenders give more pocket allowance to their children. Children who are better at financial planning also seem to receive higher pocket money from their parents,” it said.
‘No online shopping’
In reference to the e-commerce boom in India, the survey asked parents about their perceptions of children and online shopping. “While 84 per cent of parents have shopped online themselves, when it comes to their children a majority of them feel that they are worried, for different reasons,” the survey said.
Meanwhile, around 49 per cent parents said they will not encourage their children to shop online and about one-third of the parents assist their children in buying a product after being identified or found by the child online.
Also over 80 per cent of the respondents who participated in the survey said that they believe that their children follow their money habits. Even more discerning is the fact that children tend to pick up their parents’ spending habits marginally more than their saving habits, at least among those who earn annually upwards of Rs 8 lakh.