Child Savings Account: Global Trends in Design and Practice
This paper presents an overview of the global landscape of Child Savings Accounts (CSAs), covering government and financial institution objectives, common features, global trends and obstacles.
CSAs exist as policies, products and programs. They differ from standard savings accounts as they target children’s social and economic development, specifically children of low- and moderate- income families. CSAs facilitate asset accumulation at an early age, thus motivating young people to enter formal financial systems, build assets in their youth and improve their socio-economic situations. CSA design depends on specific institutional objectives such as:
- Satisfying corporate social responsibility;
- Cultivating young people and their relatives as clients;
- Fostering a savings habit among children;
- Building financial literacy among young account holders;
- Reducing poverty.
CSA features comprise low cost to account holders, modest financial incentives, convenient deposit locations and empowering children to control accounts. Finally, obstacles to CSA programs include their poor appeal to banks, lack of suitable policies and physical and institutional barriers to access.
