SBI vs Indian Overseas Bank: Children’s Savings Accounts

SBI vs Indian Overseas Bank: Children’s Savings Accounts

SBI offers two children’s savings accounts, Pehla Kadam and Pehli Udaan while Indian Overseas Bank IOB offers the SB – Little Star account for young children.

Children’s Savings Accounts from SBI

Pehla Kadam

This account is meant for all children and may be opened jointly with a parent or guardian.

Features

  • There are no minimum balance requirements in this account
  • There is a limit of Rs. 5,000 on daily transactions. Transactions such as bill payments, prepaid mobile top-ups have a limit of Rs. 2,000 within the Rs. 5,000 limit
  • SBI offers an auto-sweep option with this account called SBI Multi Option Deposit Scheme (MODS). If the accountholders opt for this, then any amount above Rs. 20,000 in the account is put in a term deposit. The MOD is initially for a sum of Rs. 10,000 and in Rs. 1,000 multiples thereafter. As is common for banks, there is no clarity on the website if the auto-sweep facility kicks in if the account has a balance of Rs. 30,000
  • There is a cap of Rs. 10 lakh on the maximum balance in a Pehla Kadam account
  • The kid is eligible to get a specially branded chequebook and passbook, and also a personalised debit card with her own photo

Note: The links to specific accounts may not work. The above data was taken from internet searches. We have put the links here in the hope that they work some day. Even the WayBack Machine shows an error when we tried to pull a page from July 5, 2017.

Pehli Udaan

The account is meant for kids above 10 years of age. They are allowed to open and operate the account on their own.

Features

  • As mentioned, any child above the age of 10 years who can read and write, may open the account in her own name without the need for any parent or guardian
  • Except for the age criteria, the other features of the Pehli Udaan account are same as for the Pehla Kadam account

Children’s Savings Accounts from Indian Overseas Bank

SB – Little Star Account

The account has been designed for all children – from 1 day old babies to up to 18 year old young adults.

Features

  • The account can be opened by any child aged 1 day to less than 18 years
  • The minimum balance needed in the account is Rs. 100, while the maximum amount that can be kept is Rs. 50,000
  • IOB offers free collection facility for cheques or draft instruments gifted to the child and valued up to Rs. 25,000 per annum
  • It also offers a Sweep-In, Sweep-Out facility where any amount in the account in excess of Rs. 10,000 is taken out of the account and turned into fixed deposits of Rs. 2,000 each. If the balance falls below Rs. 10,000 then the most recent fixed deposits are put back in the SB – Little Star Account so the balance is back to being at least Rs. 10,000
  • Parents also have the option to invest in other options such as recurring deposits, insurance, mutual funds and so on

Reference Facts

  • State Bank of India Website: https://sbi.co.in and www.onlinesbi.com (net banking)
  • Headquarters: Mumbai, Maharashtra
  • Call Centre Number: 1800 425 3800, 1800 112 211, 1800 110 009 (pensioners only)
  • Indian Overseas Bank Website: www.iob.in and www.iobnet.co.in (net banking)
  • Headquarters: Chennai, Tamil Nadu
  • Call Centre Number: 1800 425 4445