IT IS never too early to start your kids on a savings habit — just ask Ms Donna Cheng, who opened savings accounts with POSB bank and OCBC bank for her two sons when they were born.

Now aged seven and five, Ms Cheng says of her two sons: “We will probably allow them to use part of the money they saved to buy their wants when they are older, but only with permission and after my husband and I think of a way for them to earn the right to withdraw some of the money.”

Another mother, Ms Suriah Abdul Rahman, started a POSB savings account for each of her three children, aged three to five, when they were two to three months old.

“Be it a piggy bank or a savings account, it is about the importance of saving for rainy days and careful planning and use of personal resources,” says the 33-year-old homemaker.

“When they are more mature, we may sit down with them and share the possibilities of making the savings grow and to set aside some money for personal coverage, such as insurance,” she adds.

Three banks here — POSB, OCBC and Standard Chartered — have products that help children start the savings habit.

According to POSB, more than half of the kids in Singapore from newborns to 16 years old have an account with the bank. Mr Koh Kar Siong, managing director, POSB Consumer Banking Group, says: “As the child grows, it is good to involve him in this savings journey to instill in him an appreciation for savings — the first step to financial literacy.”

The bank’s latest effort is the Recycling Makes Cents! school outreach programme, which aims to teach school children to save for their future through recycling and saving coins. For the first time, children will be able to deposit money in their POSBkids account at the coin deposit machines installed in their schools.

OCBC Bank, on the other hand, has seen more than 30 per cent growth for its children- related accounts last year.

Its Mighty Savers Programme gives parents an opportunity to teach their children the value of money in an interactive way. Through a sticker and card programme, the parent rewards the child with a sticker for every dollar saved. For every 20 stickers collected, the child is entitled to a Mighty Savers gift from the bank and a new card to accumulate more savings.

“It is important to start early as good savings habits are cultivated at an early age.

The Mighty Savers Programme is a useful tool for parents to start the conversation about money and savings with their children, especially since these kids will be future credit card and mortgage clients,” says Mr Nicholas Tan, head, global wealth management, OCBC Bank.

Standard Chartered’s e$aver Kids! account offers an online saving account that provides 0.30 per cent interest rate per annum on savings of up to $50,000 with no lock-in period, no minimum deposit and balance required.

The account targets parents who regularly set aside a fixed amount of money to be deposited into the child’s savings account. However, if the account is in zero balance for five consecutive months, it will be closed.

Ms Khim Lim, 32, a senior independent financial adviser representative, has the Children Development Accounts tied to the government’s Baby Bonus Schemes for her two daughters, who are 18 months and three months old.

Her plan is to open savings accounts with passbooks for her daughters when they start primary education. The accounts will be for the children to save money from their allowances, job stints and other cash gifts, such as hongbao and scholarship awards.

“This is the time when we feel that they will be ready to try managing money on a small scale and they will benefit from that experience,” she says.

In future, she hopes that by updating their passbooks and watching their money grow over time, her daughters will appreciate the effect of compound interest and use money wisely.

For children in their teens, a savings account can provide them with a sense of pride and confidence, says certified public accountant Shekaran Krishnan. To start his two teenage sons on the right footing, he opened savings accounts for them when they were born, to save money for their tertiary education and teach them to be responsible for their savings.

“It is to inculcate financial responsibility in them before they go out to work and start to earn a regular income,” he says.

However, having a savings account is not the only way to teach a child to save, says businesswoman Ms Norzuryana Zainoi, who has a 15-year-old son. “Instilling an attitude of being prudent in their spending helps too, especially for a teenager who is growing up,” she says.

This article was first published in The Sunday Times.