No vault of their own
Hong Kong banks are failing to encourage children to save by not offering accounts designed for younger customers.
Most banks in Hong Kong do not have savings accounts that are specifically aimed at children, while some institutions will not even allow anyone aged under 16 to open an account.
Out of 10 banks visited by Money Post as part of a mystery shopping exercise, only one offered a standalone account aimed at children, rather than their parents, and just one other institution had a standard savings account that would be suitable for children.
Thomas Lee Ho-yiu, accountant ambassador for the Hong Kong Institute of Certified Public Accountants' Rich Kid, Poor Kid money management programme, would like to see banks do more to encourage children to save.
'Through Rich Kid, Poor Kid, we try to teach children a disciplined way to manage their money,' he says, adding that it is important that children experience handling and saving money so that they can learn good money management skills from an early age.
After all, it is far better to learn the downside of blowing all of your pocket money when you are six than to run up tens of thousands of dollars of credit card debt when you are in your 20s.
Evidence also suggests there are also wider benefits to encouraging children to save.
Research carried out by a team at the University of Pittsburgh's school of social work, in the United States, found that children aged between 12 and 18 who had a savings account in their own name scored an average of 9 per cent higher in maths tests than children without a savings account, regardless of race, gender or household income.
But despite the obvious advantages of encouraging children to save, parents hoping to open an account for their child in Hong Kong have few choices.
Of the 10 banks visited by Money Post, only Fubon Bank offered a straightforward savings account specifically aimed at children.
Its magi?Children Savings Account, which is for children aged up to 11, comes with a passbook decorated with cartoon pictures, as well as a savings card with the child's photograph and name on it.
But at least HK$500 is required to open the account - a sum that may take younger savers some time to accumulate.
The only bank that had an adult account that would be suitable for child savers was Public Bank, which allows parents to open an account in their child's name with just HK$10. There is no minimum balance and no charges.
Other banks suggested parents could open a standard savings account for their offspring, but many of these would be highly unsuitable for children.
All the banks demanded a minimum deposit for the account, usually of around HK$5,000, and if the account balance fell below this level, children would be hit with penalty charges of HK$50 a month.
Some banks simply said they did not allow anyone aged under 16 to open an account.
Two banks, Hang Seng and Wing Hang, had accounts that they said were aimed at children, but they appeared to be aimed at parents saving for their offspring, with Hang Seng's M.I. Kid AssetBuilder including an investment plan element and currency switching service.
Standard Chartered periodically offers a My Dream Account for children, but it can be opened only during selected promotional periods.
It offers Disney ornaments to children who achieve certain savings targets, but as these are set at HK$50,000, children are unlikely to get there on their own.
Lee thinks these accounts are part of a shift towards parents saving on their children's behalf.
He said: 'I think 20 to 30 years ago, parents would open a savings account for their children, but now the trend is starting to change to parents saving for their children.'
But he adds that by doing this, children do not get the experience of managing assets themselves.
The omission of children's savings accounts in Hong Kong is more surprising given that many of the international banks that operate here offer the accounts in other countries. In Malaysia, Standard Chartered has a Young Savers Account, which requires just one ringgit (HK$2.50) to open.
HSBC has a High Interest Savings Account for Children in Britain that can be opened with ?1 (HK$12.30), and a MySavings account aimed at seven- to 17-year-olds, which can be opened with the same sum.
So, why are banks failing to cater for younger savers? Lee thinks because the amounts that children save independently are so small, it simply is not profitable for banks to offer the accounts in the current low-interest rate environment.
But banks are likely to be missing a trick, as they can use children's savings accounts to persuade parents to take out additional products with them.
For example, Fubon Bank offers parents a credit card that can be used to earn points, which the bank will then convert into cash paid into their children's savings accounts.
Banking relationships also tend to be lifelong, and many people still bank with the same group with which they opened their first savings account. So, while children's savings accounts may not be profitable now, banks are likely to reap the rewards when young savers become adults.