We are pleased to announce the launch of Project Aalya today on October 02, 2008.
Incidentally, today is also the 139th birth anniversary of the Father of our Nation (India), Mahatma Gandhi, who, besides other things, had always preached financial independence through self-sustenance, savings and sensible investments.
Through this project, we aim to sensitise people about not only becoming financially independent, but to provide a better financial beginning to their children, the future of the country and the world.
As a first step, besides setting up the organisation and its internal processes, we will be reaching 50 parents, a list of whom we have prepared from our personal and other contacts. We will be appraising them of the advantages of opening a simple savings account for their child/children in any bank of their choice. We will also network with five front-end bankers and about 20 opinion-makers for taking this initiative forward.
We will keep our readers posted regularly about our journey, which has just begun through this competition, and also through our website: http://project-aalya.blogspot.com.
A mother, a post graduate from a leading university and working as a teacher in a metropolis, feels that her 10-year-old daughter is too young to have her own savings account.
Besides, she also feels that it is too early to have a financial plan for the child. She is of the view that this could be done when the girl grows up.
Is this a valid criteria to deprive the child of her financial identity, when it can do wonders for her in the future?
Agreed! Financial planning varies from individual-to-individual and from one family to another. However, is it not an easy excuse to shed the responsibility of planning for the child's future?
Also, does it not somewhere reflect on the lack of vision towards financial planning among parents?
And does it also not leave the child unaware of the very basic concept of saving?
We will continue to bring more case studies to you in days to follow.
An illiterate mother, working as domestic help, has several times intended to open a simple savings bank account for herself, without success. A discussion revealed that it was because she didn’t have any valid document to prove her identity and also nothing to offer as proof of her address to fulfil the KYC (know-your-customer) requirements of the Bank.
Her problem is that her husband would take all her monthly earnings to spend on himself, and secondly, whatever she could save while hiding from him, would be spent on her daily chores.
She has a daughter, for whom she wishes a different future. She wants to open an account for her, so that she can save money in the latter’s name. Also since now the daughter is a major, educated until class eight and works in the same profession, the mother feels the girl could at least save a considerable part of her own earnings.
Incidentally, the family have a ‘Ration Card’ (Public Distribution System Card) issued to them in her native village, over 500 kilometres away, where she doesn’t live anymore. She also recalls having an ‘Election Identity card’ issued in the village, but can’t locate it now. Ration Card and Election Identity Card are otherwise both valid proofs of identity.
We have decided to take up her case. We have asked her to fetch her Ration Card and possibly also the Election Identity Card (If the latter can be located) from the village. That would settle the identity issue, at least.
There are five banks in close vicinity, another one in the neighbouring locality and another two about five kilometres away. We feel, of these eight, at least one of the managers would surely be able to suggest a solution for opening a simple ‘no-frills account’ for these people.
Please keep watching this space for our experiences pursuing this case.
An illiterate mother, working as domestic help, has several times intended to open a simple savings bank account for herself, without success. A discussion revealed that it was because she didn’t have any valid document to prove her identity and also nothing to offer as proof of her address to fulfil the KYC (know-your-customer) requirements of the Bank.
Her problem is that her husband would take all her monthly earnings to spend on himself, and secondly, whatever she could save while hiding from him, would be spent on her daily chores.
She has a daughter, for whom she wishes a different future. She wants to open an account for her, so that she can save money in the latter’s name. Also since now the daughter is a major, educated until class eight and works in the same profession, the mother feels the girl could at least save a considerable part of her own earnings.
Incidentally, the family have a ‘Ration Card’ (Public Distribution System Card) issued to them in her native village, over 500 kilometres away, where she doesn’t live anymore. She also recalls having an ‘Election Identity card’ issued in the village, but can’t locate it now. Ration Card and Election Identity Card are otherwise both valid proofs of identity.
We have decided to take up her case. We have asked her to fetch her Ration Card and possibly also the Election Identity Card (If the latter can be located) from the village. That would settle the identity issue, at least.
There are five banks in close vicinity, another one in the neighbouring locality and another two about five kilometres away. We feel, of these eight, at least one of the managers would surely be able to suggest a solution for opening a simple ‘no-frills account’ for these people.
Please keep watching this space for our experiences pursuing this case.
Our cousin, now a US citizen, who is visiting India, provided us a good view of the investment options preferred by working people in his country. Remarkably, prominent in his list was investing as private equity in small/start-up companies. This was besides the usual stuff like mutual funds, real-estate etc.
Discussing available investment options for the children, he explained the 529 plan and how it allows parents to take care of the child’s college education. He also spoke of the available option of creating a trust for managing the funds/investments allocated by parents towards the child’s interests for any eventuality.
‘How about a simple bank account for the children?’
We asked referring to the two girls aged 8 and 4 respectively.
‘I would not like that,’ he replied, ‘putting money in a named account would send me totally out of control on how they might spend it and this I don’t see as a good idea.’
‘Savings Account provides opportunity to inculcate the habit of saving from a very basic level. Continued habit of saving brings financial discipline.’
This is a very nice example how wide the scope of the project reaches. In this case it effects the discussion two fold
First: Basic principals of education – freedom or control. I for example would love young children being led to self responsibility as early as possible. Thus letting them deeply feel what self-responsibility and also self-discipline means. It could be an excellent school for life. Even making mistakes, bad mistakes, feeling what it means to run out of money by own fault can be a very important; effective and efficiant learning experience for young people and preparing them well for a self responsible and self caring - free life.
Second: Putting the parents’s position of education in question. When I read the opinion of the cousin I get really scared and feel sorry for the children. When he says “would send me totally out of control on how they might spend it”…
I wonder:
a) would he not be able to “control” or say better watch what his 4 + 8 years old kids are able to do? Why? Look careful there might be a wrong setting. Education is -at least for me- a maximum of “love and example”, and not “control and sanctions” or even worse, “punishment”….
b) would he not have the greatness to let them make a mistake and than discuss positively with his kids how to prevent another mistake?
c) would even a second mistake -which certainly could happen- rather a better occasion to address the issue even deeper – because the fact that it happens is a prove that one mistake would obviously have not been enough to learn sustainable. And last but not least
d) as by no doubt the learning and training process is needed – would you (the dear cousin) rather like the alternative? That your kids are running in the same problem at a much later stage of live, when more volumes, bigger sums and maybe much higher risk is involved?
Think about it(!) or even better check your position with other parents if they all share what you say, perhaps there is also a chance for you to learn how to better educate your kids – before it is to late and they are grown up, less good prepared for managing life than it could be… you also could have a benefit cause by this initiative!
I AM VERY IMPRESSED AND I LIKE IT TO SEE HOW MUCH IMPULSES SUCH A PROJECT CAN SPEAD AROUND THE WORLD. RESULTING IN DIRECT AND INDIRECT ADVANTAGES FOR A GOOD FUTURE OF OUR CHILDREN – GOOD FUTURE IS BASED ON GOOD EDUCATION.
BIG COMPLEMENTS FROM MAINZ/GERMANY TO GITIKA & PUNEET FOR STARTING IT!!! Heinz
A mother, an officer in the Indian Armed Forces, spoke of her plans to gift her son a savings account on his second birthday next month.
'I want to give my son a financial identity,' she said, 'though I feel guilty that despite planning for my child's finances since the time I was expecting him. I have been lousy in implementing my plan so far. But, next month, I'm surely going to do that,' she added.
On further asking, why she felt the need to open a bank account for her son of two years, she was quick to add, 'To exclusively save for him; his future and to deposit all his monetary gifts, rather than spending them on wasteful items.'
She said that once the deposits in savings account reached a considerable amount, she would convert them into long-term fixed deposits and similar least-risk investments.
On being asked, if her job, which required shifting from one place to another every two years or so, was a deterrent in thinking about her child's finances. She said her move would be to set up the account in a bank with nationwide core banking facility and that would solve the problem.
Just as we were about to give her a thumbs up, she mentioned that, however, she would like her son to know about his account and finances only when he is a teenager, so that he may not misuse his funds in childhood.'
We question - what if the son might go ecstatic learning of a considerable sum of money in his name? An age of 15 could very well do that to anyone! So, why leave that possibility of destroying all the years of good work that has been put up for a far greater cause? Why not facilitate for his awareness and exposure right from the very childhood?
‘Insurance policy is the best investment for a child,’ said my colleague, who has been blessed with a baby-girl just a month ago.
We explained him the benefits of having a savings account for her little girl.
He gave us a patient audience and thereafter said, ‘I think, I already spent all the money that had come as gift for my daughter from friends and relatives at the time of her birth!’
He confessed it happened because he had no possible way to differentiate that money from the others. Instantly, he promised that he would open an account for the child and preserve her moneys.
In a short span he was so charged up that he came with another idea and added, ‘may be I might open a joint account to allow grandparents to also take care of the kids interest in his or his wife’s absence.’ Nevertheless, an account he said, his girl is sure going to have.
A journalist confessed that before a chat with us he never thought of opening savings account for his two children, a three and a half year old daughter and a one year old son. In fact he never knew that he could open an account for them.
He said it was a wonderful idea of start depositing small amounts at convenience in the child's name for subsequent investment elsewhere. Otherwise one always invests in bulk, he observed.
Our friend, who has existing investments in form of insurance policies for self and children, has promised to let us know when he opens an account for them, which he says would be very soon.
He said he was thrilled to have this information and we are thrilled to watch his enthusiasm.
In our interaction with parents, we have come across instances of parents having operational bank accounts in the name of their children. Interestingly, in both the instances, we encountered, the accounts were operating under the guardianship of grandparents.
The news of people with running accounts for their kids made us happy, however our excitement evaporated soon upon understanding the motive behind running such accounts.
These parents have been using these accounts for parking funds which for some reason they cannot show to be existing in their own names.
'I am not going to leave my children with loads of deposit, unless they prove worthy of managing it,' said a first generation entrepreneur and a father of two kindergärtners.
He agreed that a simple savings account could play a vital role in teaching the virtues of financial discipline and inculcating in them the habit of saving.
'There can be no success in life without discipline and financial discipline is one of the key disciplines of all. One can live very happily without having too much at one's disposal and one could choose to be unhappy with everything under one's realms. Its all about what choices do we make with the opportunities we get,' he said.
However, he didn't know until we talked to him that one could open an account for children as young as his.
'I agree with what you say and shall take up the matter with my bank manager for opening account for my children', he said.
'Savings Account - provides opportunity to inculcate the habit of saving from a very basic level. Regular habit of saving brings financial discipline.'
'A minor account gives a child an opportunity to learn about savings in a very simple way as compared to other modes of investments', said a banker when asked about whether opening an account was in the interest of the child or not.
Elaborating his view, he said that it is difficult for a small child to understand the intricacies of investments like mutual funds, insurance etc., but to guide him about saving little amount and depositing in his account, which further reaps an interest and helps in money growth, is easier for him to learn.
Citing an example he said, a savings account could teach a child how to save and deposit his or her little tokens of monetary gifts given by grandparents, relatives etc. He admitted that this is the right approach towards financial literacy.
He also told that his own daughter had her first savings account when she turned twelve and since then she has been operating her money herself.
Interestingly, at the onset of our conversation on the subject, the banker was more supportive of other value-added products offered by banks. However, when we discussed with him the advantages of a savings account, he outrightly expressed that banks should be more forthcoming in creating this awareness among their customers.
We feel 'accounts for minors' is one tool which has long been forgotten by bankers themselves, leave aside the desired beneficiaries.
Look out for our next case study where we delve more on this issue.
After drawing your attention towards nine cases enlisting the advantages of a savings bank account for a child, we now bring forth our first milestone, the tenth case study of our project, which shows why nothing should act as a deterrent in starting this small initiative for your child.
This I am writing from our own experience, when we went to open a savings account for our one-and-a-half year old daughter.
We were quite taken by surprise when a bank official remarked as to why we wanted to open an account for 'such a young child.'
That day we decided to give our daughter a financial identity and were successful in accomplishing it, the very next day.
We could do it as we were 'aware' that this simple beginning would pave way for our child's financial literacy in the long run and keep alive our motivation to be able to translate our thoughts into action, on this front.
What we now feel is that it requires a bit of determination and a positive approach to do the task, no matter how small the amount you might have to initiate the purpose, or how young your child might be.
The ultimate objective of this project is to enhance financial literacy of the society by sensitizing young parents; inviting active engagement of their loved ones into the formal financial systems. The tool we have chosen for the purpose is a simple savings account for the child. Nevertheless there are other options as well.
We recently came across a wonderful instance of improvisation of financial discipline, which forms the subject of this case study.
An editor of a leading business magazine wanted to gift something to her college going nephew, as well as teach him the importance of saving money. So she took a Unit Link Insurance Plan (ULIP) in his name and offered him a preposition.
She told him that she would pay the premiums for the first three years, while he is studying in the college. This would ensure that the policy sails through the minimum lock-in period. Thereafter the nephew would have two options.
He could either take out all the money proportionate to the value of units after 5 years, which happens to be the first bail-out opportunity and use the funds in any way he might deem it fit or he could keep the policy alive by paying the premiums thereon to let the policy complete its tenure of twenty years.
We are recording this case here to track its progress in due course of years to follow.
As we talked about in our last case study that the aim of our project is to sensitise people towards financial literacy, here we present yet another interesting case where there is awareness about our concept, but lack of effort is a hindering factor.
A 13-year-old girl has a savings account in a nationalised bank since the last two years, but her parents and she herself had forgotten about it, till we brought up the issue.
The girl's mother, a senior official working with a country's leading corporate giant, said they had opened the account with the purpose of teaching their daughter to save and put money therein every month, but had just operated the account once in the last two years.
The lady also told that their daughter had herself filled up the account opening application and completed other requisites, but they never cared to deposit money or even look into her account details further.
She admitted that though their daughter saves her monetary gifts at home, they sometimes do take out money from it, when running short of cash.
She promised that she would remind her daughter of her account and from now on would sincerely inculcate the habit of exclusively saving money for the girl in her account and teach her how money grows in a bank.
Cheers! we'll keep a watch on that.
Look up for our next case study on the daughter's perspective
As a second analysis to the issue raised up in case study no. 12, we contacted the 13-year-old girl to get her take on the issue.
The girl, studying in seventh standard, immediately recalled that she had gone to the bank with her father two years ago and had been thrilled to open her own bank account.
She said, 'I know that by keeping money in a bank, it multiplies after a certain time.'
This knowledge being already there with the teenager, we asked her why then she never cared to put in her monetary gifts in the bank and see it multiplying.
Well, she had an instant reply to this. 'I will definitely go, if my parents take me there and I do not have to go to school at that time.'
She assured that she would ask her mother to put money in her account, which she receives from relatives and elders.
We wish the girl 'all the best' in her pursuit of financial interaction with the formal financial system.
‘I have opened an account in the name of my wife to deposit all the amounts that come as gifts for my two year old son. I didn’t know I could open an account in his name as well, nor did anyone suggest it earlier,’ said a Business Executive, who has made extensive investments for his child through various programs that would enable him availability of funds at all critical occasions, starting kid’s passing the high-school exam and moving to junior college, subsequently graduation to senior college, and starting his career.
‘I find it a terrific idea. This could boost the child’s self-esteem. He could be so well taught about financial management and that could lead him to be an entrepreneur,’ he said excitedly when informed that his child’s account would carry all benefits like ATM Card etc. and how it could be used for not just saving for long-term, but also for saving for short-term objectives, like buying a gift for self.
Our friend thereafter went on to tell us instances from his life wherein how through improvised financial discipline one of his friends had turned himself into a successful entrepreneur, only inheriting a small outlet from his father. He spoke about how one of the richest person and world’s most respected entrepreneur has inculcated financial discipline in his kids by paying them small rewards every time they contributed to menial domestic works.
He has said that he would discuss converting their saving account into a proper minor account or making it into a joint-account with his son as the co-beneficiary.
Here's a story of a grandmother who raised her three kids to be practicing doctors today using some very simple techniques, enforced with persistent self-discipline.
Around 40 years back, when depositing money in post office was the most prevalent method of saving, she made good use of the facility for her needs. This resulted in her never facing dearth of funds for her children, she confessed.
With little help from her husband, and limited knowledge of financial systems, she didn’t think very big. All she did was to regularly keep depositing small amounts from her salary in recurring deposits (RD) for each of her three children. This planning, she improvised in small phases of three to five years, focusing on one goal at a time.
She began by planning first for the primary education, then secondary studies and later on for college tutorials and other needs separately for each of her 3 children.
She said this way she was always able to 'grow' her money, as per the needs of her children.
In today's times, she feels that a savings account for children, right from their early childhood, could not only serve a good purpose in teaching money discipline, but would work ‘golden’ for successful financial planning.
Here's a different kind of a story altogether. A mother of a seven-year-old girl has never felt the need to open a bank account for her daughter and does not even intend to do it in the near future, as she herself feels a lot hassled managing her various accounts.
She says her parents opened an account for her only after she had joined university, besides she had never felt deprived anyway. She would only think of an independent account for her daughter when the latter grows up, she said.
She told that she had invested for her child in other financial products and opening a savings account was no big deal.
Nevertheless, she also disclosed that she maintains an 'emotional account' in her name, wherein she saves for her daughter exclusively and even deposits her monetary gifts.
In a way, she has been saving for her daughter, though not in her direct name.
As for financial identity, she said her child does not require it at the moment and that her passport (the daughter's) is a valid document for her proof of identity.
We completely agree to her viewpoint that discipline should be brought in everyday life, yet a simple savings account, which does not require any frills, could be a good step in inculcating financial literacy and discipline.
Can one open a simple savings account for exclusively teaching the child the importance of saving money? Well, why not!
That's what a father of a one-and-a-half year old child wants to do.
In fact, while concept of creating financial literacy as 'unquestionably correct', the person, a senior official working with a multinational media company, said he would like his child to learn financial discipline this way.
Even as he got motivated to open an account after an interaction with us, he quipped that he would rather not look at it for the purpose of saving because of low rate of interest offered by banks on it, than other high interest products.
For his son's financial planning, he said he looks at a 15-year perspective and putting in money in a low-interest option is not what he would like to do.
But then, he agreed that he would certainly like his son to have an account and make him learn to save and see the money growth by doing so.
While signing off, he also said now he would try to open the account sooner than he had earlier thought of.
We sincerely would be the first to applaud his effort!
Of all the people we met so far as a part of our project, this one came up as a quite inspiring tête-à-tête! How, we'll just let you know.
A busy doctor and a mother of two daughters, three years-old and six months old respectively, proudly said she opened a savings account for her elder daughter when she was just six months old and intends to do the same for the younger one, in days to come.
I was happy to find someone who herself was listing the benefits of such an account, without me getting an opportunity to say anything.
Then she told me her own story...
She said the habit of saving through a bank account was inculcated in her and her siblings by her parents since their early childhood.
She was two-years old when her father gifted a savings bank account and then would give her small pocket money every month and would tell her to save from it, if she could.
'In those days bank people would come at home and take the amount for depositing. So, we had to open our piggy banks right then and show how much we saved. If I had saved Rs. five our father would put in another Rs. 20 and make it 25, to be given to the bank official for deposition.'
In an elated voice, she further said, 'When I was in class X (high school), I had Rs. 76,000* in my account by making these small savings. I felt like a rich girl then. I want my daughters also to enjoy the same feeling and am sure they will learn financial discipline, the purpose for which we have opened their accounts.'
I had nothing more to say, than penning her case with joy.
An old university time friend, when we put the question, whether he had opened a savings account for his three-year-old son, he responded, 'I never thought about it.'
And then he thought…. and instantly got a guilt pang as to why he did not do that earlier.
Someone who spends almost 14-15 hours away from home every working day, said he always thought that putting money in the name of the child, in some long-term policies would be enough.
Nevertheless, he assured that this year, he would gift a savings account to his son on the auspicious occasion of Diwali (a festival celebrated in India worshipping Goddess Laxmi, the deity of wealth and prosperity), coming this very month. He said that he would make his wife, the guardian of the account.
Our talk reminded him of the toy piggy bank his son has at home, which is lying unused. He informed that he would see to it that the same is put to active use henceforth.
Our good wishes for his renewed vigour over this front. We would really want to thank him once he has implemented the desired! Till then, we'll keep finding more such colleagues and sensitising them.
A mother of a ten-month old girl feels that she would bring about the habit of saving in her daughter, but not through banking. Then how does she plan to do that? Let's find out.
The woman, herself working in the banking sector, is of the view that a toy piggy bank at home would be a good idea for her daughter's initial exposure towards the knowledge of saving.
She finds this an attractive method as she says to teach a child the intricacies of banking, at an early age, is difficult, but to garner his/her interest by way of a toy is an easier way out.
The mother is already in a saving mode as she has opened a recurrent deposit for the girl two months ago and aims to regularly put in money there, so that it grows to a considerable sum 20 years down the line and could be well enough for the latter's educational requirements.
She said while she opened the RD, she never thought of financial literacy. But now, after an interaction with us, she is determined to make her daughter learn herself the habit of saving and financial discipline, even as she has also pledged her full support to our cause.
We were quite excited when a neighbour of ours, having two sons aged 11 and three, told that she and her husband had gifted their sons a bank deposit on their first birthdays, respectively.
However, our joy was short lived when during the course of conversation it came to light that she did not even know that one could open savings account for minors.
Then, when we asked what was that she gifted her children. It turned out to be life insurance policies.
The lady admitted that she does not even know properly how to fill up a cheque or a deposit form in a bank. She said being a housewife, she never had an exposure to these activities and neither was ever a need for her to know simple banking procedures.
We told her about the savings account and its advantages and we thought may be that would stay in her frame of thoughts for a while.
But, by the end of our conversation she said that she felt doubly sure and would ask her husband to open an account for their elder son first and would then think about the younger one.
She said she would not want her children also to be ignorant like her. She would herself start teaching the elder boy how he could save money and make it grow in a bank.
Likewise, she would also make a move for the younger one. We told her that her journey towards financial literacy had just begun.
A 15 days old father very enthusiastically told us about the customs and ceremonies that follow the birth of a child in their community.
He explained in detail the function called ‘Seven Blessings’, which is performed on the seventh day of the birth and wherein seven learned people, mostly priests, are invited from the neighbourhood, to shower blessings on the child.
He went on and gave a description of how it all happened for her little girl and how the functions ended up being a big ceremony, thanks largely to the repute the family enjoys and the relations it has nurtured over the generations.
‘My daughter got Rs. 5500 as gift in cash,’ he said, ‘I am wondering what do I do of this money.’
Open a minor account for her in a bank was what we suggested; an idea he liked instantly.
I was having a chat with a friend on financial planning in reference to her one-and-a-half year old daughter. This friend stays overseas, where her husband has a job.
She revealed that her husband and she herself have not made any financial plans so far, but for an insurance policy, nor do they intend to invest in the kid’s name and increase their banking baggage.
I prodded no further on the issue and straight away asked what they did with their daughter's monetary gifts received so far.
‘We have spent each and every penny of it on some household expense or on daughter's requirements.’
Then when I told her about the benefits of a simple savings account and about how she could have saved for the child exclusively right from the beginning, my friend agreed and felt that what is currently a 'zero' in the name of savings for the child, could have been actually quite a sum of money, had they realised this earlier.
She promised to discuss the proposal of a 'no frills' savings account for the daughter with her husband.
Nevertheless, she said they would like to do it only once they have returned to India and settled here, rather than while always being on the move, and more so, she told, her husband had no time to think about it because of his very hectic working hours down there.
Ironically, this very couple had got a passport made for their little child within no time when they had wanted to move abroad, I remembered.
An IT executive and a mother of a seven year old son, said that she thought the account could be opened only once the child is 10 years old.
She herself had an account, which her school had helped her open when she was in class five. As a child they would make very small savings and give it to their teacher, who would deposit the money in their account. However, she never directly operated that account.
This account she closed once she started her college. The sum was nothing significant, but it seems that served as her foundation course for instilling the habit of saving for the rest of her life.
Today she saves for her son through 5-year-term fixed deposits, which she makes once every year, investing a significant amount.
She feels the idea of opening an account for teaching financial discipline to children is excellent and would let us know when she has done the same for her son.
A friend of mine, who has a two-year-old son and is expecting her second baby soon, told me she neither has time to think about financial planning for her son nor is it on her list of priorities at the moment.
She said right now she and her husband are busy in the process of expanding their family.
As I asked her, if she knew any of the benefits of a savings account for children, she told that they have a financial consultant and he has been telling them to open an account, also enlisting the good purposes it serves. So, then what was holding them back, I asked.
She said she would think about it only later, not now.
Would it not be convenient for her to do some financial planning for her son, before the other child is born, and may be later she could do the same for the second one, I told her.
She said her husband and she were not at all thinking on these lines. If at all, she would like to plan an education policy for her son, nothing more than that.
I guess, this has come up as a challenging case for us and we would certainly be making another move towards this friend to sensitise her towards this need.
A 36-year-old father of two, a son (14) and a daughter (8), invests in National Savings Certificate (NSC) and gold for his children. The other investment, he says, he makes for his children is in education.
Despite a very humble beginning, at a very young age he has been able to chart a good financial course for his kids, thanks largely to the stringent personal discipline taught to him by his parents.
His children don't have a savings account yet, which he says he would now gift to them once they move to the next class, like his father had done for him when he had turned 12.
Nevertheless, it has not devoid him from teaching his children the value of saving and the importance of financial discipline.
Every month the kids receive some amount as their pocket money and are encouraged to save out of that for purchasing something of higher value in due course of time. He says his children simply love it.
Many a times, he told, it has happened so that children have offered help from their funds, when he ran out of cash, while on a shopping trip. 'Those are some of the most joyous moments of life,' he confessed.
A software engineer on a sabbatical post motherhood (she has a seven-year-old daughter and a two-year-old son) told me that she opened recurring deposits (RD) for both her children just after their birth.
She said she could do this so soon and had rather planned about it even before the childrens' birth because her mother herself is a banking agent, thus helping her implement the plan quickly
.
The daughter also has a piggy bank and all her monetary gifts have been deposited in it since her birth and it has not been checked hence.
However, the little girl is being groomed towards financial discipline by being given a set monthly pocket money and knows that it is only once in a month that the family would go to a restaurant for eating. The girl has grasped this in her stride and does not ask for a second outing even if her heart desires so, the mother proudly said.
The same habit she has decided to inculcate in her son also as he grows up.
On why then not start a savings account also for the two, the lady said at the moment she only wants to invest for the children in high return yielding products, and not ones like a simple account where rate of interest offered by the banks is quite less in comparison.
Despite the fact, I was happy to talk to her for her awareness towards financial discipline.
While leaving, the girl, who has just turned 18, informed that she would keep encouraging her mother to get both of them their own bank accounts in the village. She said that she had realized that keeping her small savings in bank was not only safe, but also would make the money grow in the longer run.
A former national-level hockey player now working with Indian Railways gifted her 16-year-old daughter a savings account on her fourth birthday.
This was done with the money collected by then for the child as monetary gifts. The teenager has since been taught the value of money and its process of growth.
The proud mother elatedly said that no matter even if her daughter receives just a token amount, yet the latter insists that the money be kept separately and deposited in her account at a convenient time.
This way, the daughter has not only gained knowledge about the importance of saving, but has been able to grow it to a considerable sum, over the years.
Of course, the parents have taken care of the girl's other financial needs also by investing in insurance policies and recurring deposits (RD), but a simple savings account is what the girl is most proud of, because she feels it is her exclusive money, saved in tit-bits over the years.
The mother feels she could have never been able to sensitize the child any other way, but by making her participate actively in the process.
...And as noteworthy as this is the story of the girl's younger sibling. Want to know more about it. Do read our next case study.
In the previous case study we brought before you the financial awareness of a mother-daughter duo. Now, there's more to the story what with the parents also having a younger eight-year-old daughter.
While they gifted their elder daughter an account on her fourth birthday, they were able to do the same for the younger one soon after her birth as she got a good sum as monetary gifts. More so, the father of the daughters, also a former basketball player, now happens to be legal advisor to a few banks and that association certainly helped.
Meanwhile, taking in the footsteps of her elder sister, the young girl has kept a small purse for herself at home and keeps all monetary gifts there.
One day, the mother asked her to hand over the purse to her so that she could put the money in her account. The little one immediately told her mother to wait for some more time.
When the mother asked why she wanted to wait, the girl said, "Let me collect a little more sum. If you deposit it right now, my purse would go empty and I don't want it to be like that. Wait for some more time, when I get a little money, I will give you the sum in purse so far."
The mother couldn't help gushing at the child's consciousness towards an empty purse.
Well, like her, who wants their purses to be empty? So, one can really take a lesson from an eight-year-old, isn't it!
A father, working with a large private sector bank, confessed that he never thought about the advantages of a savings bank account for minors.
He, however, said his wife had been coaxing him for the last two years to invest small-small savings of their children in a simple account, but he never took it seriously.
Nevertheless, he said, he's gotten his daughter into the awareness of saving through a piggy bank at home.
Last year, the daughter desired to have a bicycle as her birthday gift. The parents broke open the girl’s piggy bank. They found Rs. 400 in it. They put in another Rs. 600 and bought a bicycle worth Rs. 1000 for her.
The girl was told that the bicycle for her had come from her own savings in the piggy bank. This made the little one very happy. The father informed.
The father has now promised to open savings bank account for both the children to be used like a piggy bank.
We just hope that we've been able to motivate a banker himself towards a good purpose.
Our respondent of Case Study No. 19, a journalist living in National Capital Region, who had promised to open an account for his son this Diwali, called us to inform that he has done the needful with a nationalized bank.
He informed that the child’s grandfather was thrilled at the idea and immediately took the three-year-old grandson to a nationalized bank and opened an account for him.
Good news flew in when our friend (Case Study No. 6) informed last evening that he was all set to open savings account for his two children, this weekend.
He said things got a bit delayed because he could not provide the bank with a residential proof (he stays in a rented apartment in suburban Mumbai). But, he has now managed the required document and since Saturday is a day off from work, he would be implementing the task then.
He also thanked us for 'showing the good path', and said his friends and family members also supported our view and told him it was a good way of investing for children in present times of economic slowdown.
I just told my friend to keep up the good work and spirit for his children. Cheers!
Changemakers provided us with this wonderful platform to share our idea with the world. It has proved a great support in launching our project – Project Aalya – A bank account for my child.
We would continue our journey in reaching out to more and more people, motivating them to open account for their children. We would continue to keep publishing their stories in form of case studies.
Our next set of activities would include, releasing of a white paper on status of minor accounts based on our survey of parents from across the world. This would feature on our website during the second week of January 2009.
We look forward to seeing more and more of you over there and invite your active participation in spreading awareness for enhanced financial literacy of the society by large.
Comments
We are pleased to announce the launch of Project Aalya today on October 02, 2008.
Incidentally, today is also the 139th birth anniversary of the Father of our Nation (India), Mahatma Gandhi, who, besides other things, had always preached financial independence through self-sustenance, savings and sensible investments.
Through this project, we aim to sensitise people about not only becoming financially independent, but to provide a better financial beginning to their children, the future of the country and the world.
As a first step, besides setting up the organisation and its internal processes, we will be reaching 50 parents, a list of whom we have prepared from our personal and other contacts. We will be appraising them of the advantages of opening a simple savings account for their child/children in any bank of their choice. We will also network with five front-end bankers and about 20 opinion-makers for taking this initiative forward.
We will keep our readers posted regularly about our journey, which has just begun through this competition, and also through our website: http://project-aalya.blogspot.com.
Regards
Gitika Saxena
project.aalya@gmail.com
A mother, a post graduate from a leading university and working as a teacher in a metropolis, feels that her 10-year-old daughter is too young to have her own savings account.
Besides, she also feels that it is too early to have a financial plan for the child. She is of the view that this could be done when the girl grows up.
Is this a valid criteria to deprive the child of her financial identity, when it can do wonders for her in the future?
Agreed! Financial planning varies from individual-to-individual and from one family to another. However, is it not an easy excuse to shed the responsibility of planning for the child's future?
Also, does it not somewhere reflect on the lack of vision towards financial planning among parents?
And does it also not leave the child unaware of the very basic concept of saving?
We will continue to bring more case studies to you in days to follow.
Gitika Saxena
project.aalya@gmail.com
“Savings account- An irrevocable gift to your child”
An illiterate mother, working as domestic help, has several times intended to open a simple savings bank account for herself, without success. A discussion revealed that it was because she didn’t have any valid document to prove her identity and also nothing to offer as proof of her address to fulfil the KYC (know-your-customer) requirements of the Bank.
Her problem is that her husband would take all her monthly earnings to spend on himself, and secondly, whatever she could save while hiding from him, would be spent on her daily chores.
She has a daughter, for whom she wishes a different future. She wants to open an account for her, so that she can save money in the latter’s name. Also since now the daughter is a major, educated until class eight and works in the same profession, the mother feels the girl could at least save a considerable part of her own earnings.
Incidentally, the family have a ‘Ration Card’ (Public Distribution System Card) issued to them in her native village, over 500 kilometres away, where she doesn’t live anymore. She also recalls having an ‘Election Identity card’ issued in the village, but can’t locate it now. Ration Card and Election Identity Card are otherwise both valid proofs of identity.
We have decided to take up her case. We have asked her to fetch her Ration Card and possibly also the Election Identity Card (If the latter can be located) from the village. That would settle the identity issue, at least.
There are five banks in close vicinity, another one in the neighbouring locality and another two about five kilometres away. We feel, of these eight, at least one of the managers would surely be able to suggest a solution for opening a simple ‘no-frills account’ for these people.
Please keep watching this space for our experiences pursuing this case.
Gitika Saxena
project.aalya@gmail.com
‘Savings Account a formal proof of identity for your child.’
An illiterate mother, working as domestic help, has several times intended to open a simple savings bank account for herself, without success. A discussion revealed that it was because she didn’t have any valid document to prove her identity and also nothing to offer as proof of her address to fulfil the KYC (know-your-customer) requirements of the Bank.
Her problem is that her husband would take all her monthly earnings to spend on himself, and secondly, whatever she could save while hiding from him, would be spent on her daily chores.
She has a daughter, for whom she wishes a different future. She wants to open an account for her, so that she can save money in the latter’s name. Also since now the daughter is a major, educated until class eight and works in the same profession, the mother feels the girl could at least save a considerable part of her own earnings.
Incidentally, the family have a ‘Ration Card’ (Public Distribution System Card) issued to them in her native village, over 500 kilometres away, where she doesn’t live anymore. She also recalls having an ‘Election Identity card’ issued in the village, but can’t locate it now. Ration Card and Election Identity Card are otherwise both valid proofs of identity.
We have decided to take up her case. We have asked her to fetch her Ration Card and possibly also the Election Identity Card (If the latter can be located) from the village. That would settle the identity issue, at least.
There are five banks in close vicinity, another one in the neighbouring locality and another two about five kilometres away. We feel, of these eight, at least one of the managers would surely be able to suggest a solution for opening a simple ‘no-frills account’ for these people.
Please keep watching this space for our experiences pursuing this case.
Gitika Saxena
project.aalya@gmail.com
‘Savings Account a formal proof of identity for your child.’
Our cousin, now a US citizen, who is visiting India, provided us a good view of the investment options preferred by working people in his country. Remarkably, prominent in his list was investing as private equity in small/start-up companies. This was besides the usual stuff like mutual funds, real-estate etc.
Discussing available investment options for the children, he explained the 529 plan and how it allows parents to take care of the child’s college education. He also spoke of the available option of creating a trust for managing the funds/investments allocated by parents towards the child’s interests for any eventuality.
‘How about a simple bank account for the children?’
We asked referring to the two girls aged 8 and 4 respectively.
‘I would not like that,’ he replied, ‘putting money in a named account would send me totally out of control on how they might spend it and this I don’t see as a good idea.’
Puneet Srivastava
project-aalya@gmail.com
‘Savings Account provides opportunity to inculcate the habit of saving from a very basic level. Continued habit of saving brings financial discipline.’
This is a very nice example how wide the scope of the project reaches. In this case it effects the discussion two fold
First: Basic principals of education – freedom or control. I for example would love young children being led to self responsibility as early as possible. Thus letting them deeply feel what self-responsibility and also self-discipline means. It could be an excellent school for life. Even making mistakes, bad mistakes, feeling what it means to run out of money by own fault can be a very important; effective and efficiant learning experience for young people and preparing them well for a self responsible and self caring - free life.
Second: Putting the parents’s position of education in question. When I read the opinion of the cousin I get really scared and feel sorry for the children. When he says “would send me totally out of control on how they might spend it”…
I wonder:
a) would he not be able to “control” or say better watch what his 4 + 8 years old kids are able to do? Why? Look careful there might be a wrong setting. Education is -at least for me- a maximum of “love and example”, and not “control and sanctions” or even worse, “punishment”….
b) would he not have the greatness to let them make a mistake and than discuss positively with his kids how to prevent another mistake?
c) would even a second mistake -which certainly could happen- rather a better occasion to address the issue even deeper – because the fact that it happens is a prove that one mistake would obviously have not been enough to learn sustainable. And last but not least
d) as by no doubt the learning and training process is needed – would you (the dear cousin) rather like the alternative? That your kids are running in the same problem at a much later stage of live, when more volumes, bigger sums and maybe much higher risk is involved?
Think about it(!) or even better check your position with other parents if they all share what you say, perhaps there is also a chance for you to learn how to better educate your kids – before it is to late and they are grown up, less good prepared for managing life than it could be… you also could have a benefit cause by this initiative!
I AM VERY IMPRESSED AND I LIKE IT TO SEE HOW MUCH IMPULSES SUCH A PROJECT CAN SPEAD AROUND THE WORLD. RESULTING IN DIRECT AND INDIRECT ADVANTAGES FOR A GOOD FUTURE OF OUR CHILDREN – GOOD FUTURE IS BASED ON GOOD EDUCATION.
BIG COMPLEMENTS FROM MAINZ/GERMANY TO GITIKA & PUNEET FOR STARTING IT!!! Heinz
Dear Heinz
Thanks for your kind words and support.
'Self-Responsibility' is a very important concept which you have provided us. We shall use it in our messages under the project.
We look forward to serving you more case studies in days to follow.
Regards
Puneet
A mother, an officer in the Indian Armed Forces, spoke of her plans to gift her son a savings account on his second birthday next month.
'I want to give my son a financial identity,' she said, 'though I feel guilty that despite planning for my child's finances since the time I was expecting him. I have been lousy in implementing my plan so far. But, next month, I'm surely going to do that,' she added.
On further asking, why she felt the need to open a bank account for her son of two years, she was quick to add, 'To exclusively save for him; his future and to deposit all his monetary gifts, rather than spending them on wasteful items.'
She said that once the deposits in savings account reached a considerable amount, she would convert them into long-term fixed deposits and similar least-risk investments.
On being asked, if her job, which required shifting from one place to another every two years or so, was a deterrent in thinking about her child's finances. She said her move would be to set up the account in a bank with nationwide core banking facility and that would solve the problem.
Just as we were about to give her a thumbs up, she mentioned that, however, she would like her son to know about his account and finances only when he is a teenager, so that he may not misuse his funds in childhood.'
We question - what if the son might go ecstatic learning of a considerable sum of money in his name? An age of 15 could very well do that to anyone! So, why leave that possibility of destroying all the years of good work that has been put up for a far greater cause? Why not facilitate for his awareness and exposure right from the very childhood?
Gitika Saxena
project.aalya@gmail.com
'Savings Account - creation of an asset base for the child.'
‘Insurance policy is the best investment for a child,’ said my colleague, who has been blessed with a baby-girl just a month ago.
We explained him the benefits of having a savings account for her little girl.
He gave us a patient audience and thereafter said, ‘I think, I already spent all the money that had come as gift for my daughter from friends and relatives at the time of her birth!’
He confessed it happened because he had no possible way to differentiate that money from the others. Instantly, he promised that he would open an account for the child and preserve her moneys.
In a short span he was so charged up that he came with another idea and added, ‘may be I might open a joint account to allow grandparents to also take care of the kids interest in his or his wife’s absence.’ Nevertheless, an account he said, his girl is sure going to have.
Puneet Srivastava
project.aalya@gmail.com
‘Savings Account - Child’s money stays in his/her name, including inflows that come as gifts.’
A journalist confessed that before a chat with us he never thought of opening savings account for his two children, a three and a half year old daughter and a one year old son. In fact he never knew that he could open an account for them.
He said it was a wonderful idea of start depositing small amounts at convenience in the child's name for subsequent investment elsewhere. Otherwise one always invests in bulk, he observed.
Our friend, who has existing investments in form of insurance policies for self and children, has promised to let us know when he opens an account for them, which he says would be very soon.
He said he was thrilled to have this information and we are thrilled to watch his enthusiasm.
Gitika Saxena
project.aalya@gmail.com
'Savings Account – save, deposit and withdraw at convenience.'
This has now happened twice with us.
In our interaction with parents, we have come across instances of parents having operational bank accounts in the name of their children. Interestingly, in both the instances, we encountered, the accounts were operating under the guardianship of grandparents.
The news of people with running accounts for their kids made us happy, however our excitement evaporated soon upon understanding the motive behind running such accounts.
These parents have been using these accounts for parking funds which for some reason they cannot show to be existing in their own names.
Project-Aalya does not support such practices.
Gitika Saxena
project.aalya@gmail.com
'Savings Account for your child allows for no locking of money.'
'I am not going to leave my children with loads of deposit, unless they prove worthy of managing it,' said a first generation entrepreneur and a father of two kindergärtners.
He agreed that a simple savings account could play a vital role in teaching the virtues of financial discipline and inculcating in them the habit of saving.
'There can be no success in life without discipline and financial discipline is one of the key disciplines of all. One can live very happily without having too much at one's disposal and one could choose to be unhappy with everything under one's realms. Its all about what choices do we make with the opportunities we get,' he said.
However, he didn't know until we talked to him that one could open an account for children as young as his.
'I agree with what you say and shall take up the matter with my bank manager for opening account for my children', he said.
Puneet Srivastava
project-aalya@gmail.com
'Savings Account - provides opportunity to inculcate the habit of saving from a very basic level. Regular habit of saving brings financial discipline.'
'A minor account gives a child an opportunity to learn about savings in a very simple way as compared to other modes of investments', said a banker when asked about whether opening an account was in the interest of the child or not.
Elaborating his view, he said that it is difficult for a small child to understand the intricacies of investments like mutual funds, insurance etc., but to guide him about saving little amount and depositing in his account, which further reaps an interest and helps in money growth, is easier for him to learn.
Citing an example he said, a savings account could teach a child how to save and deposit his or her little tokens of monetary gifts given by grandparents, relatives etc. He admitted that this is the right approach towards financial literacy.
He also told that his own daughter had her first savings account when she turned twelve and since then she has been operating her money herself.
Interestingly, at the onset of our conversation on the subject, the banker was more supportive of other value-added products offered by banks. However, when we discussed with him the advantages of a savings account, he outrightly expressed that banks should be more forthcoming in creating this awareness among their customers.
We feel 'accounts for minors' is one tool which has long been forgotten by bankers themselves, leave aside the desired beneficiaries.
Look out for our next case study where we delve more on this issue.
Gitika Saxena
project.aalya@gmail.com
'Once 10 years of age the child can self-operate the savings account, helping boost his/her self-esteem, self-confidence and sense-of-pride.
After drawing your attention towards nine cases enlisting the advantages of a savings bank account for a child, we now bring forth our first milestone, the tenth case study of our project, which shows why nothing should act as a deterrent in starting this small initiative for your child.
This I am writing from our own experience, when we went to open a savings account for our one-and-a-half year old daughter.
We were quite taken by surprise when a bank official remarked as to why we wanted to open an account for 'such a young child.'
That day we decided to give our daughter a financial identity and were successful in accomplishing it, the very next day.
We could do it as we were 'aware' that this simple beginning would pave way for our child's financial literacy in the long run and keep alive our motivation to be able to translate our thoughts into action, on this front.
What we now feel is that it requires a bit of determination and a positive approach to do the task, no matter how small the amount you might have to initiate the purpose, or how young your child might be.
Gitika Saxena
project.aalya@gmail.com
'Determination and awareness key to success in financial literacy.'
The ultimate objective of this project is to enhance financial literacy of the society by sensitizing young parents; inviting active engagement of their loved ones into the formal financial systems. The tool we have chosen for the purpose is a simple savings account for the child. Nevertheless there are other options as well.
We recently came across a wonderful instance of improvisation of financial discipline, which forms the subject of this case study.
An editor of a leading business magazine wanted to gift something to her college going nephew, as well as teach him the importance of saving money. So she took a Unit Link Insurance Plan (ULIP) in his name and offered him a preposition.
She told him that she would pay the premiums for the first three years, while he is studying in the college. This would ensure that the policy sails through the minimum lock-in period. Thereafter the nephew would have two options.
He could either take out all the money proportionate to the value of units after 5 years, which happens to be the first bail-out opportunity and use the funds in any way he might deem it fit or he could keep the policy alive by paying the premiums thereon to let the policy complete its tenure of twenty years.
We are recording this case here to track its progress in due course of years to follow.
Puneet Srivastava
project.aalya@gmail.com
‘Savings Account allows for accumulated savings to be easily invested in other products – Fixed Deposits, Mutual Funds, Insurance etc.’
As we talked about in our last case study that the aim of our project is to sensitise people towards financial literacy, here we present yet another interesting case where there is awareness about our concept, but lack of effort is a hindering factor.
A 13-year-old girl has a savings account in a nationalised bank since the last two years, but her parents and she herself had forgotten about it, till we brought up the issue.
The girl's mother, a senior official working with a country's leading corporate giant, said they had opened the account with the purpose of teaching their daughter to save and put money therein every month, but had just operated the account once in the last two years.
The lady also told that their daughter had herself filled up the account opening application and completed other requisites, but they never cared to deposit money or even look into her account details further.
She admitted that though their daughter saves her monetary gifts at home, they sometimes do take out money from it, when running short of cash.
She promised that she would remind her daughter of her account and from now on would sincerely inculcate the habit of exclusively saving money for the girl in her account and teach her how money grows in a bank.
Cheers! we'll keep a watch on that.
Look up for our next case study on the daughter's perspective
Gitika Saxena
project.aalya@gmail.com
‘Savings Account - Provides a platform for parents to save exclusively for the child.’
As a second analysis to the issue raised up in case study no. 12, we contacted the 13-year-old girl to get her take on the issue.
The girl, studying in seventh standard, immediately recalled that she had gone to the bank with her father two years ago and had been thrilled to open her own bank account.
She said, 'I know that by keeping money in a bank, it multiplies after a certain time.'
This knowledge being already there with the teenager, we asked her why then she never cared to put in her monetary gifts in the bank and see it multiplying.
Well, she had an instant reply to this. 'I will definitely go, if my parents take me there and I do not have to go to school at that time.'
She assured that she would ask her mother to put money in her account, which she receives from relatives and elders.
We wish the girl 'all the best' in her pursuit of financial interaction with the formal financial system.
Gitika Saxena
project.aalya@gmail.com
‘Savings Account allows for easy accessibility through multiple modes – ATM, Net Banking, Mobile Banking etc.’
‘I have opened an account in the name of my wife to deposit all the amounts that come as gifts for my two year old son. I didn’t know I could open an account in his name as well, nor did anyone suggest it earlier,’ said a Business Executive, who has made extensive investments for his child through various programs that would enable him availability of funds at all critical occasions, starting kid’s passing the high-school exam and moving to junior college, subsequently graduation to senior college, and starting his career.
‘I find it a terrific idea. This could boost the child’s self-esteem. He could be so well taught about financial management and that could lead him to be an entrepreneur,’ he said excitedly when informed that his child’s account would carry all benefits like ATM Card etc. and how it could be used for not just saving for long-term, but also for saving for short-term objectives, like buying a gift for self.
Our friend thereafter went on to tell us instances from his life wherein how through improvised financial discipline one of his friends had turned himself into a successful entrepreneur, only inheriting a small outlet from his father. He spoke about how one of the richest person and world’s most respected entrepreneur has inculcated financial discipline in his kids by paying them small rewards every time they contributed to menial domestic works.
He has said that he would discuss converting their saving account into a proper minor account or making it into a joint-account with his son as the co-beneficiary.
Puneet Srivastava
project.aalya@gmail.com
‘Savings Account Serves as a base for long-term savings for future needs of the child – education, career, marriage etc.’
Nothing succeeds like success!
Here's a story of a grandmother who raised her three kids to be practicing doctors today using some very simple techniques, enforced with persistent self-discipline.
Around 40 years back, when depositing money in post office was the most prevalent method of saving, she made good use of the facility for her needs. This resulted in her never facing dearth of funds for her children, she confessed.
With little help from her husband, and limited knowledge of financial systems, she didn’t think very big. All she did was to regularly keep depositing small amounts from her salary in recurring deposits (RD) for each of her three children. This planning, she improvised in small phases of three to five years, focusing on one goal at a time.
She began by planning first for the primary education, then secondary studies and later on for college tutorials and other needs separately for each of her 3 children.
She said this way she was always able to 'grow' her money, as per the needs of her children.
In today's times, she feels that a savings account for children, right from their early childhood, could not only serve a good purpose in teaching money discipline, but would work ‘golden’ for successful financial planning.
Gitika Saxena
project.aalya@gmail.com
‘Regular habit of saving brings financial discipline.’
Here's a different kind of a story altogether. A mother of a seven-year-old girl has never felt the need to open a bank account for her daughter and does not even intend to do it in the near future, as she herself feels a lot hassled managing her various accounts.
She says her parents opened an account for her only after she had joined university, besides she had never felt deprived anyway. She would only think of an independent account for her daughter when the latter grows up, she said.
She told that she had invested for her child in other financial products and opening a savings account was no big deal.
Nevertheless, she also disclosed that she maintains an 'emotional account' in her name, wherein she saves for her daughter exclusively and even deposits her monetary gifts.
In a way, she has been saving for her daughter, though not in her direct name.
As for financial identity, she said her child does not require it at the moment and that her passport (the daughter's) is a valid document for her proof of identity.
We completely agree to her viewpoint that discipline should be brought in everyday life, yet a simple savings account, which does not require any frills, could be a good step in inculcating financial literacy and discipline.
We welcome your comments on the case study.
Gitika Saxena
project.aalya@gmail.com
‘Savings Account provides a platform for parents to save exclusively for the child.’
A bank account for my child - presentation on You Tube
http://www.youtube.com/watch?v=ksCbBlBllFE
Can one open a simple savings account for exclusively teaching the child the importance of saving money? Well, why not!
That's what a father of a one-and-a-half year old child wants to do.
In fact, while concept of creating financial literacy as 'unquestionably correct', the person, a senior official working with a multinational media company, said he would like his child to learn financial discipline this way.
Even as he got motivated to open an account after an interaction with us, he quipped that he would rather not look at it for the purpose of saving because of low rate of interest offered by banks on it, than other high interest products.
For his son's financial planning, he said he looks at a 15-year perspective and putting in money in a low-interest option is not what he would like to do.
But then, he agreed that he would certainly like his son to have an account and make him learn to save and see the money growth by doing so.
While signing off, he also said now he would try to open the account sooner than he had earlier thought of.
We sincerely would be the first to applaud his effort!
Gitika Saxena
project.aalya@gmail.com
‘Savings Account - provides opportunity to inculcate the habit of saving from a very basic level.’
Of all the people we met so far as a part of our project, this one came up as a quite inspiring tête-à-tête! How, we'll just let you know.
A busy doctor and a mother of two daughters, three years-old and six months old respectively, proudly said she opened a savings account for her elder daughter when she was just six months old and intends to do the same for the younger one, in days to come.
I was happy to find someone who herself was listing the benefits of such an account, without me getting an opportunity to say anything.
Then she told me her own story...
She said the habit of saving through a bank account was inculcated in her and her siblings by her parents since their early childhood.
She was two-years old when her father gifted a savings bank account and then would give her small pocket money every month and would tell her to save from it, if she could.
'In those days bank people would come at home and take the amount for depositing. So, we had to open our piggy banks right then and show how much we saved. If I had saved Rs. five our father would put in another Rs. 20 and make it 25, to be given to the bank official for deposition.'
In an elated voice, she further said, 'When I was in class X (high school), I had Rs. 76,000* in my account by making these small savings. I felt like a rich girl then. I want my daughters also to enjoy the same feeling and am sure they will learn financial discipline, the purpose for which we have opened their accounts.'
I had nothing more to say, than penning her case with joy.
Gitika Saxena
project.aalya@gmail.com
*Rs. 76000 is USD 1600 (at current rate) & USD 3100 (at rate in her high school times.)
‘Savings Account provides opportunity to inculcate the habit of saving from a very basic level.’
An old university time friend, when we put the question, whether he had opened a savings account for his three-year-old son, he responded, 'I never thought about it.'
And then he thought…. and instantly got a guilt pang as to why he did not do that earlier.
Someone who spends almost 14-15 hours away from home every working day, said he always thought that putting money in the name of the child, in some long-term policies would be enough.
Nevertheless, he assured that this year, he would gift a savings account to his son on the auspicious occasion of Diwali (a festival celebrated in India worshipping Goddess Laxmi, the deity of wealth and prosperity), coming this very month. He said that he would make his wife, the guardian of the account.
Our talk reminded him of the toy piggy bank his son has at home, which is lying unused. He informed that he would see to it that the same is put to active use henceforth.
Our good wishes for his renewed vigour over this front. We would really want to thank him once he has implemented the desired! Till then, we'll keep finding more such colleagues and sensitising them.
Gitika Saxena
project.aalya@gmail.com
‘Savings Account could be used as a simple piggy bank as well as for routing child’s pocket-money.’
A mother of a ten-month old girl feels that she would bring about the habit of saving in her daughter, but not through banking. Then how does she plan to do that? Let's find out.
The woman, herself working in the banking sector, is of the view that a toy piggy bank at home would be a good idea for her daughter's initial exposure towards the knowledge of saving.
She finds this an attractive method as she says to teach a child the intricacies of banking, at an early age, is difficult, but to garner his/her interest by way of a toy is an easier way out.
The mother is already in a saving mode as she has opened a recurrent deposit for the girl two months ago and aims to regularly put in money there, so that it grows to a considerable sum 20 years down the line and could be well enough for the latter's educational requirements.
She said while she opened the RD, she never thought of financial literacy. But now, after an interaction with us, she is determined to make her daughter learn herself the habit of saving and financial discipline, even as she has also pledged her full support to our cause.
Gitika Saxena
project.aalya@gmail.com
‘Savings Account serves as a base for long-term savings for future needs of the child – education, career, marriage etc.’
We were quite excited when a neighbour of ours, having two sons aged 11 and three, told that she and her husband had gifted their sons a bank deposit on their first birthdays, respectively.
However, our joy was short lived when during the course of conversation it came to light that she did not even know that one could open savings account for minors.
Then, when we asked what was that she gifted her children. It turned out to be life insurance policies.
The lady admitted that she does not even know properly how to fill up a cheque or a deposit form in a bank. She said being a housewife, she never had an exposure to these activities and neither was ever a need for her to know simple banking procedures.
We told her about the savings account and its advantages and we thought may be that would stay in her frame of thoughts for a while.
But, by the end of our conversation she said that she felt doubly sure and would ask her husband to open an account for their elder son first and would then think about the younger one.
She said she would not want her children also to be ignorant like her. She would herself start teaching the elder boy how he could save money and make it grow in a bank.
Likewise, she would also make a move for the younger one. We told her that her journey towards financial literacy had just begun.
And as they say, 'Its better late than never.'
Gitika Saxena
project.aalya@gmail.com
‘Once 10 years of age the child can self-operate the savings account, helping boost his/her self-esteem, self-confidence and sense-of-pride.’
A 15 days old father very enthusiastically told us about the customs and ceremonies that follow the birth of a child in their community.
He explained in detail the function called ‘Seven Blessings’, which is performed on the seventh day of the birth and wherein seven learned people, mostly priests, are invited from the neighbourhood, to shower blessings on the child.
He went on and gave a description of how it all happened for her little girl and how the functions ended up being a big ceremony, thanks largely to the repute the family enjoys and the relations it has nurtured over the generations.
‘My daughter got Rs. 5500 as gift in cash,’ he said, ‘I am wondering what do I do of this money.’
Open a minor account for her in a bank was what we suggested; an idea he liked instantly.
Puneet Srivastava
project.aalya@gmail.com
‘Savings Account - child’s money stays in his/her name, including inflows that come as gifts.’
I was having a chat with a friend on financial planning in reference to her one-and-a-half year old daughter. This friend stays overseas, where her husband has a job.
She revealed that her husband and she herself have not made any financial plans so far, but for an insurance policy, nor do they intend to invest in the kid’s name and increase their banking baggage.
I prodded no further on the issue and straight away asked what they did with their daughter's monetary gifts received so far.
‘We have spent each and every penny of it on some household expense or on daughter's requirements.’
Then when I told her about the benefits of a simple savings account and about how she could have saved for the child exclusively right from the beginning, my friend agreed and felt that what is currently a 'zero' in the name of savings for the child, could have been actually quite a sum of money, had they realised this earlier.
She promised to discuss the proposal of a 'no frills' savings account for the daughter with her husband.
Nevertheless, she said they would like to do it only once they have returned to India and settled here, rather than while always being on the move, and more so, she told, her husband had no time to think about it because of his very hectic working hours down there.
Ironically, this very couple had got a passport made for their little child within no time when they had wanted to move abroad, I remembered.
Gitika Saxena
project.aalya@gmail.com
‘Savings Account – An irrevocable gift to the child.’
An IT executive and a mother of a seven year old son, said that she thought the account could be opened only once the child is 10 years old.
She herself had an account, which her school had helped her open when she was in class five. As a child they would make very small savings and give it to their teacher, who would deposit the money in their account. However, she never directly operated that account.
This account she closed once she started her college. The sum was nothing significant, but it seems that served as her foundation course for instilling the habit of saving for the rest of her life.
Today she saves for her son through 5-year-term fixed deposits, which she makes once every year, investing a significant amount.
She feels the idea of opening an account for teaching financial discipline to children is excellent and would let us know when she has done the same for her son.
Puneet Srivastava
project.aalya@gmail.com
‘Savings Account - Save, deposit and withdraw at convenience.’
A friend of mine, who has a two-year-old son and is expecting her second baby soon, told me she neither has time to think about financial planning for her son nor is it on her list of priorities at the moment.
She said right now she and her husband are busy in the process of expanding their family.
As I asked her, if she knew any of the benefits of a savings account for children, she told that they have a financial consultant and he has been telling them to open an account, also enlisting the good purposes it serves. So, then what was holding them back, I asked.
She said she would think about it only later, not now.
Would it not be convenient for her to do some financial planning for her son, before the other child is born, and may be later she could do the same for the second one, I told her.
She said her husband and she were not at all thinking on these lines. If at all, she would like to plan an education policy for her son, nothing more than that.
I guess, this has come up as a challenging case for us and we would certainly be making another move towards this friend to sensitise her towards this need.
Gitika Saxena
project.aalya@gmail.com
‘Savings Account – Creation of an asset base for the child.’
A 36-year-old father of two, a son (14) and a daughter (8), invests in National Savings Certificate (NSC) and gold for his children. The other investment, he says, he makes for his children is in education.
Despite a very humble beginning, at a very young age he has been able to chart a good financial course for his kids, thanks largely to the stringent personal discipline taught to him by his parents.
His children don't have a savings account yet, which he says he would now gift to them once they move to the next class, like his father had done for him when he had turned 12.
Nevertheless, it has not devoid him from teaching his children the value of saving and the importance of financial discipline.
Every month the kids receive some amount as their pocket money and are encouraged to save out of that for purchasing something of higher value in due course of time. He says his children simply love it.
Many a times, he told, it has happened so that children have offered help from their funds, when he ran out of cash, while on a shopping trip. 'Those are some of the most joyous moments of life,' he confessed.
Gitika Saxena
project.aalya@gmail.com
‘Savings Account - Provides opportunity to inculcate the habit of saving from a very basic level.’
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Heal your self, your community, and your world
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A software engineer on a sabbatical post motherhood (she has a seven-year-old daughter and a two-year-old son) told me that she opened recurring deposits (RD) for both her children just after their birth.
She said she could do this so soon and had rather planned about it even before the childrens' birth because her mother herself is a banking agent, thus helping her implement the plan quickly
.
The daughter also has a piggy bank and all her monetary gifts have been deposited in it since her birth and it has not been checked hence.
However, the little girl is being groomed towards financial discipline by being given a set monthly pocket money and knows that it is only once in a month that the family would go to a restaurant for eating. The girl has grasped this in her stride and does not ask for a second outing even if her heart desires so, the mother proudly said.
The same habit she has decided to inculcate in her son also as he grows up.
On why then not start a savings account also for the two, the lady said at the moment she only wants to invest for the children in high return yielding products, and not ones like a simple account where rate of interest offered by the banks is quite less in comparison.
Despite the fact, I was happy to talk to her for her awareness towards financial discipline.
Gitika Saxena
project.aalya@gmail.com
'Savings Account allows no locking of money.'
As an update to the Case Study No. 2 published on Project Aalya website (http://project-aalya.blogspot.com/2008/10/case-study-no-2.html) and Changemakers competition page (http://www.changemakers.net/en-us/node/10269#comment-11101), the mother and daughter duo have moved back to their village earlier this weekend with intentions of settling down over there.
While leaving, the girl, who has just turned 18, informed that she would keep encouraging her mother to get both of them their own bank accounts in the village. She said that she had realized that keeping her small savings in bank was not only safe, but also would make the money grow in the longer run.
Our good wishes for their future.
Gitika Saxena
project.aalya@gmail.com
'Savings Account save, deposit and withdraw at convenience.'
A former national-level hockey player now working with Indian Railways gifted her 16-year-old daughter a savings account on her fourth birthday.
This was done with the money collected by then for the child as monetary gifts. The teenager has since been taught the value of money and its process of growth.
The proud mother elatedly said that no matter even if her daughter receives just a token amount, yet the latter insists that the money be kept separately and deposited in her account at a convenient time.
This way, the daughter has not only gained knowledge about the importance of saving, but has been able to grow it to a considerable sum, over the years.
Of course, the parents have taken care of the girl's other financial needs also by investing in insurance policies and recurring deposits (RD), but a simple savings account is what the girl is most proud of, because she feels it is her exclusive money, saved in tit-bits over the years.
The mother feels she could have never been able to sensitize the child any other way, but by making her participate actively in the process.
...And as noteworthy as this is the story of the girl's younger sibling. Want to know more about it. Do read our next case study.
Gitika Saxena
project.aalya@gmail.com
‘Savings Account an irrevocable gift to the child.’
In the previous case study we brought before you the financial awareness of a mother-daughter duo. Now, there's more to the story what with the parents also having a younger eight-year-old daughter.
While they gifted their elder daughter an account on her fourth birthday, they were able to do the same for the younger one soon after her birth as she got a good sum as monetary gifts. More so, the father of the daughters, also a former basketball player, now happens to be legal advisor to a few banks and that association certainly helped.
Meanwhile, taking in the footsteps of her elder sister, the young girl has kept a small purse for herself at home and keeps all monetary gifts there.
One day, the mother asked her to hand over the purse to her so that she could put the money in her account. The little one immediately told her mother to wait for some more time.
When the mother asked why she wanted to wait, the girl said, "Let me collect a little more sum. If you deposit it right now, my purse would go empty and I don't want it to be like that. Wait for some more time, when I get a little money, I will give you the sum in purse so far."
The mother couldn't help gushing at the child's consciousness towards an empty purse.
Well, like her, who wants their purses to be empty? So, one can really take a lesson from an eight-year-old, isn't it!
Gitika Saxena
project.aalya@gmail.com
‘Savings Account - creation of an asset base for the child.’
A father, working with a large private sector bank, confessed that he never thought about the advantages of a savings bank account for minors.
He, however, said his wife had been coaxing him for the last two years to invest small-small savings of their children in a simple account, but he never took it seriously.
Nevertheless, he said, he's gotten his daughter into the awareness of saving through a piggy bank at home.
Last year, the daughter desired to have a bicycle as her birthday gift. The parents broke open the girl’s piggy bank. They found Rs. 400 in it. They put in another Rs. 600 and bought a bicycle worth Rs. 1000 for her.
The girl was told that the bicycle for her had come from her own savings in the piggy bank. This made the little one very happy. The father informed.
The father has now promised to open savings bank account for both the children to be used like a piggy bank.
We just hope that we've been able to motivate a banker himself towards a good purpose.
Gitika Saxena
project.aalya@gmail.com
‘Savings Account - could be used as a simple piggy bank as well as for routing child’s pocket-money.’
Our respondent of Case Study No. 19, a journalist living in National Capital Region, who had promised to open an account for his son this Diwali, called us to inform that he has done the needful with a nationalized bank.
He informed that the child’s grandfather was thrilled at the idea and immediately took the three-year-old grandson to a nationalized bank and opened an account for him.
Our good wishes to the family!
Gitika Saxena
project.aalya@gmail.com
‘Savings Account – An irrevocable gift to the child.’
Good news flew in when our friend (Case Study No. 6) informed last evening that he was all set to open savings account for his two children, this weekend.
He said things got a bit delayed because he could not provide the bank with a residential proof (he stays in a rented apartment in suburban Mumbai). But, he has now managed the required document and since Saturday is a day off from work, he would be implementing the task then.
He also thanked us for 'showing the good path', and said his friends and family members also supported our view and told him it was a good way of investing for children in present times of economic slowdown.
I just told my friend to keep up the good work and spirit for his children. Cheers!
Gitika Saxena
project.aalya@gmail.com
‘Savings Account – A formal proof of identity for the child.’
Changemakers provided us with this wonderful platform to share our idea with the world. It has proved a great support in launching our project – Project Aalya – A bank account for my child.
We would continue our journey in reaching out to more and more people, motivating them to open account for their children. We would continue to keep publishing their stories in form of case studies.
All this and more, here onwards, will be available on our website: http://project-aalya.blogspot.com/
Our next set of activities would include, releasing of a white paper on status of minor accounts based on our survey of parents from across the world. This would feature on our website during the second week of January 2009.
We look forward to seeing more and more of you over there and invite your active participation in spreading awareness for enhanced financial literacy of the society by large.
Gitika & Puneet Srivastava
project.aalya@gmail.com
http://project-aalya.blogspot.com/
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